I B dI ploma program m e

A suite of new resources for the

2011 IB Economics Syllabus
The 2011 syllabus changes are going to impact everyone, and we’ve developed this new edition of our trusted Economics Course Companion to support both you and your students through the changes.

2nd edition

So what’s new? A brand new CD-ROM packed with extra material, a glossary to help EAL students focus on the theory, integrated revision support and thorough preparation for the new quantitative element for HL.

HL material is integrated, so you can seamlessly challenge all your pupils

, and profit Costs, revenues

1 Quantity of labour (V) 0 1 2
As we add an additional unit of labour, more output (TP) is produced

2 Total product (TP) 0 10 25 45 70 90 105 115 120

3 Average product (AP)


Marginal product (MP) 10

2 Macroeconom

al product es, using its e and margin a firm produc Total, averag l output that have already (TP) is the tota period. As we Total product g more a given time able factors in eased by applyin fixed and vari can only be incr the short run d factors. said, output in ors to the fixe able fact units of the vari on average, by duced, put that is pro l output t (AP) is the out TP ___ re TP is the tota Average produc AP 5 V , whe or employed. variable factor. the variable fact each unit of the ber of units of ed by using V is the num that is produc produced and extra output ∆TP is the ∆TP duct (MP) is the 5 ____, where Marginal pro ∆V able factor. MP ber of units of of the vari nge in the num an extra unit ∆V is the cha l output and change in tota d. factor employe and the variable (fixed factors) four machines machines. e. A firm has rs to work the Take an exampl more operato put by using Table 6.1. increases its out for each week are given in res Production figu

Uniquely developed in partnership with the IB, so you can be confident it takes the right approach.
1 Microeconomic s

Exercises, activities, statistics and case studies are fully up-to-date and use examples students can relate to, helping them connect learning with the wider world

The level of over all economic activ ity

a thinker Read the follo wing extract conc erning the oil Gulf of Mexico spill in the in 2010. How does the issue highlight

Student workp oint 13.3 Be

the importanc e of valuing natu ral resources in income accounts national ?

Plenty of charts and diagrams are integrated, to explain concepts visually and ease understanding

10 12.5 15 17.5 18 17.5 16.43 15

15 20 25 20 15 10 5
The extra units are of output that n each produced whe unit of labour is added

- The valued Gulf of Mexico such resource oil s, including the need for gove spill highlights biodiversity, a rnments to term for the wide include the valu array of anim e of natural al and plant spec resources, such ies. “The oil spill goes as fisheries, whe to the heart calculating the n of a contradic size of their tory set of signa economies, the ls,” said the UNEP United Nations executive direc environment tor. He said that the chief said. money spent A U.N. Environm on cleaning up the ent spill from BP Programme repo Plc’s ruptured well rt on Tuesday in the Gulf of urged business Mexico would es to take mor be included in e account of their gross domestic impact on the product, the natural resource conventional s which peop measure of econ le depend on. It omic activity, but man said the priva y costs to natu te sector would re, including the act faster if health of fishe governments ries and the survival more explicitly of marine creatures, wou ld not. “An oil spill

Referring to th e new resource ac BP oil spill, the U.N. urges counting LONDON, July 13 (Reuters)

could turn out to be thing for the GDP a positive indicator, whil it has actually e caused a far grea ter (negative) impa ct in terms of the natural wealth and natural capit of the United al States.”

3 4 5 6 7 8

uct per week marginal prod , average, and Table 6.1 Total

Assessment advice is included in every chapter, to help students achieve the best possible results

Real GDP

In developed country econ omies we can where there are generally see periods of risin a pattern g growth, follo slowing grow th and even falli wed by periods ng growth. This of business cycle is known as the or trade cycle. The business fluctuations in cycle is the peri economic acti odic vity The phases of the business cycl measured by changes in real GDP. e are known trough, and reco as boom, rece very. While the ssion, irregular, the fluctuations are, most common in practice, high illustration of standard peri ly the business cycl odic cycle. This e shows a is illustrated in Figure 13.3.

The business cycle

Assessment adv

ice: and marginal total, average, d to calculate you may be aske In HL paper 3, or diagrams. a set of data and/ product from

Boom Recession Recovery Trough Contraction 0


Figure 13.3 The standard busin ess cycle

IB Course Co

mpanion: Econ

omics 2nd ed

ition IB Course Co mpanion: Economics 2n d edition

In the recovery increasing at ar is known as aggr and businesses a demand by hou s workers so that u spend their inco m spending incr ease service can resu lt demand in an eco an economy “bo om and the rate of gro potential outp ut. E to slow down the g total demand . This A recession is defin growth, that is, falli where the econ omy decrease in GDP gro grow, but at a slowe demand will lead firm more people are une levels of dem and resu At some poin t the con the trough. Out put can be some people with jo foreigners will demand running budget deficits finance their consumpt for investment will demand will pick resu up, th the cycle will repeat itse As the diagram shows, t GDP than the first and e illustrates the important periodic fluctuat ions in r trend, or long -term poten The periodic fluc tuations i while the econ omy’s longoutput. This repr esents the over time (but is not to be c The difference between act the output gap. At point A is producing belo w its trend problem. At poin t B there is producing abo ve its trend, i. be a problem. This illustrate s short run it is quite possible between infla tion and unem unemployment will result in inflation be a prob ary pressure addressed in grea ter detail late


Exam questions are in every chapter, to ensure pupils are fully prepared for the external assessment

TOK is integrated, making it easier for you to foster crucial critical thinking skills in an Economics context.

Plus a brand new CD-ROM is loaded with extra material to

further stretch your students. Flip over to find out more.

I B dI ploma program m e
The new Course Companion – what’s on the CD?
Interactive diagrams on some of the most challenging topics – to help you solidify comprehension Revision sheets to help students fully comprehend the most important ideas Full glossary to support your EAL students, plus a glossary of diagrams to use on the whiteboard Specimen exam papers to ensure students are really prepared for the external assessment
Brand new companion CD-ROM

Brand new companion CD-ROM

Comprehensive revision and skills development
Also new from Oxford, the 2nd edition of our Economics Study Guide, fully updated to match the new syllabus and thoroughly covering all the key concepts including the quantitative element. Plus, a brand new Skills and Practice text that will help your students strengthen the skills they need to successfully tackle the IB Economics exam. Go online to find out more: www.oxfordsecondary.co.uk/ib.

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IB Course Companion: Economics 2nd edition IB Skills and Practice: Economics (Sep 2011) IB Study Guide: Economics 2nd edition (Dec 2011)

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