ΔMΔYthe fraction with numerator cap delta cap M and denominator cap delta cap Y end-fraction
HL students must analyze production timelines, distinguish between fixed and variable costs, and pinpoint profit-maximizing outputs. Cost Formulas Average Total Cost (ATC): Average Fixed Cost (AFC): Average Variable Cost (AVC): Marginal Cost (MC): The cost of producing one extra unit.
When governments step into the market, you must calculate the financial impacts. ib economics hl formula booklet repack
The multiplier effect shows how an initial injection of exogenous spending leads to a larger eventual change in real GDP.
The booklet gives you PED = 1.2, but the repack reminds you: "If PED > 1, a price decrease increases total revenue." This is a classic 4-mark calculation follow-up. ΔMΔYthe fraction with numerator cap delta cap M
This section covers the behavior of individual economic agents—consumers, firms, and markets. It’s heavy on elasticity, costs, revenues, and market structures. Here’s how to repack it.
National income can be calculated through the expenditure, income, or output approach. The expenditure approach is the primary math focus. Gross Domestic Product (GDP) - Expenditure Approach The multiplier effect shows how an initial injection
PED, YED, and PES calculations using percentage change formulas.
Breakdown of Total, Average, and Marginal Costs ( TCcap T cap C ATCcap A cap T cap C MCcap M cap C ) and Revenues ( TRcap T cap R ARcap A cap R MRcap M cap R Efficiencies: Formulas for Allocative Efficiency ( ) and Productive Efficiency ( Theory of the Firm (HL Only): Shutdown conditions ( ) and profit maximization ( Macroeconomics (Unit 3):
Although not pure formulas, these are crucial for Paper 3 evaluations of market efficiency.