Summary IB Economics Paper 1 and Paper 2 Evaluations/Guide (HL)

Latitudesurfer




Things​ ​You​ ​Need​ ​To​ ​Know​ ​For​ ​Evaluations
(For​ ​PP1​ ​part​ ​b​ ​and​ ​PP2​ ​part​ ​d)
Microeconomics
Unit​ ​4:​ ​Elasticity

-​ ​Usefulness​ ​for​ ​Firms​ ​and​ ​Governments
-​ ​Firms: Pricing​ ​Strategy
-​ ​Government: Determine​ ​What​ ​and​ ​How​ ​Much​ ​to​ ​Tax

Unit​ ​5:​ ​Govt’​ ​Intervention
-​ ​Tax
-​ ​Black​ ​Market
-​ ​Dependance​ ​on​ ​PED
-​ ​Identifying​ ​who​ ​and​ ​how​ ​much​ ​to​ ​tax
-​ ​Regressiveness​ ​(See​ ​later​ ​Chapters)
-​ ​Impact​ ​on​ ​Young​ ​Ppl
-​ ​Unemployment
-​ ​Might​ ​be​ ​ineffective​ ​at​ ​reducing​ ​quantity​ ​consumed​ ​if​ ​inelastic
-​ ​Can​ ​be​ ​favourable​ ​to​ ​govt’​ ​revenue​ ​if​ ​inelastic​ ​demand
-​ ​High​ ​revenue​ ​with​ ​low​ ​unemployment​ ​as​ ​a​ ​result

-​ ​Limited,​ ​Tradable​ ​Permit
-​ ​Limit​ ​production​ ​and​ ​doesn't​ ​solve​ ​root​ ​problem
-​ ​Increase​ ​Production​ ​Cost
-​ ​Unemployment​ ​etc.
-​ ​Difficulty​ ​and​ ​opportunity​ ​cost​ ​of​ ​enforcement
-​ ​Might​ ​be​ ​ineffective

-​ ​Total​ ​Ban
-​ ​Black​ ​Market
-​ ​Difficulty​ ​and​ ​opportunity​ ​cost​ ​of​ ​enforcement
-​ ​Unemployment​ ​of​ ​entire​ ​industries
-​ ​Loss​ ​in​ ​tax​ ​revenue​ ​compared​ ​to​ ​tax

-​ ​Subsidy
-​ ​Identifying​ ​who​ ​and​ ​how​ ​much​ ​to​ ​give
-​ ​Opportunity​ ​Cost
-​ ​Dependance​ ​on​ ​PED

, Latitudesurfer




-​ ​Vocational​ ​Training
-​ ​Opportunity​ ​Cost
-​ ​Might​ ​not​ ​be​ ​effective,​ ​hard​ ​to​ ​know​ ​if​ ​effective
-​ ​Long​ ​delay​ ​until​ ​it​ ​takes​ ​effect



-​ ​Negative​ ​and​ ​Positive​ ​Adverts
-​ ​Opportunity​ ​Cost
-​ ​Might​ ​not​ ​have​ ​effect,​ ​hard​ ​to​ ​gauge
-​ ​Time​ ​lag

-​ ​State​ ​Provision​ ​or​ ​Forced​ ​Enforcement​ ​(eg:​ ​Forced​ ​Vaccination​ ​or​ ​State​ ​Healthcare)
-​ ​Opportunity​ ​Cost
-​ ​Possible​ ​Discontent

-​ ​Max​ ​Price​ ​/​ ​Price​ ​Ceiling
-​ ​Opportunity​ ​Cost​ ​in​ ​Enforcement
-​ ​Excess​ ​Demand
-​ ​Black​ ​Market​ ​Arise​ ​as​ ​a​ ​Result
-​ ​Need​ ​to​ ​Address​ ​Shortage
-​ ​Increase​ ​Supply
-​ ​Subsidise​ ​Firms
-​ ​Govt’​ ​Provision
-​ ​Release​ ​Stocks
-​ ​Decrease​ ​Demand
-​ ​Tax,​ ​Negative​ ​Ad​ ​etc.

-​ ​Minimum​ ​Price​ ​/​ ​Price​ ​Floor
-​ ​Opportunity​ ​Cost​ ​in​ ​Enforcement
-​ ​Excess​ ​Supply
-​ ​Government​ ​Buying​ ​Excess​ ​Goods​ ​and:
-​ ​Storage
-​ ​Opportunity​ ​Cost
-​ ​Impossible​ ​to​ ​store​ ​some​ ​goods​ ​for​ ​a​ ​long​ ​time​ ​(grain)
-​ ​Destroy​ ​the​ ​Excess​ ​Goods
-​ ​Opportunity​ ​Cost
-​ ​Discontent​ ​in​ ​Citizens
-​ ​Export​ ​or​ ​Dumping
-​ ​Strain​ ​in​ ​International​ ​Relations