The PPC illustrates the maximum potential output combination of two goods an economy can produce given fixed resources and technology.
Macroeconomic equations evaluate national income accounts, inflation dynamics, and policy multipliers. National Income Accounting
Understanding costs, revenues, and profit maximization rules is critical for Paper 3 data response questions. Cost Formulas (Total Fixed Cost + Total Variable Cost) Average Total Cost (ATC):
CPI=Cost of Basket in Specific YearCost of Basket in Base Year×100CPI equals the fraction with numerator Cost of Basket in Specific Year and denominator Cost of Basket in Base Year end-fraction cross 100 ib economics hl formula booklet repack
PES=%ΔQs%ΔPPES equals the fraction with numerator % cap delta cap Q sub s and denominator % cap delta cap P end-fraction : Elastic supply : Inelastic supply Market Welfare and Consumer/Producer Surplus
On a blank page at the front of your repack, draw a decision tree:
Before heading into your Paper 3 exam, ensure you can execute these four steps cleanly: The PPC illustrates the maximum potential output combination
Average Revenue (AR)=TRQ=PAverage Revenue (AR) equals the fraction with numerator TR and denominator cap Q end-fraction equals cap P
The area above the supply curve and below the market price.
CPI=Cost of Market Basket in Current YearCost of Market Basket in Base Year×100CPI equals the fraction with numerator Cost of Market Basket in Current Year and denominator Cost of Market Basket in Base Year end-fraction cross 100 Cost Formulas (Total Fixed Cost + Total Variable
Most repacks are organized by the four main syllabus units, focusing heavily on HL-exclusive quantitative requirements.
[ \textRER = \frace \times P_\textforeignP_\texthome ] Where ( e ) = nominal exchange rate. A rise in RER means a real appreciation—exports become less competitive.
YED=%ΔQd%ΔY(where Y=Income)YED equals the fraction with numerator % cap delta cap Q sub d and denominator % cap delta cap Y end-fraction space open paren where cap Y equals Income close paren : Normal good : Necessity (Income inelastic normal good) : Luxury (Income elastic normal good) : Inferior good Price Elasticity of Supply (PES) Formula:
Microeconomics heavily relies on calculating elasticities, costs, revenues, and market efficiencies. Memorizing these structures helps you quickly solve Paper 3 quantitative prompts. 1.1 Elasticities
Macroeconomic math focuses on measuring national income, modeling economic activity, and evaluating the impacts of fiscal policies. 2.1 Measuring Economic Activity