The IB Economics Higher Level (HL) course relies heavily on a student's ability to master mathematical calculations, especially for Paper 3 , which is almost entirely calculation-based. Unlike other IB subjects, there is no official "data booklet" provided during the exam, meaning all formulas must be memorized. The following "repack" organizes the essential formulas and concepts you need to master for the current syllabus. 1. Fundamentals & Microeconomics Microeconomics calculations focus on market behavior, consumer choices, and firm performance. Linear Functions: Demand: is the intercept and is the slope). Supply: is the intercept and is the slope). Market Equilibrium: Elasticities: Price Elasticity of Demand (PED): Income Elasticity of Demand (YED): Cross Price Elasticity of Demand (XED): Price Elasticity of Supply (PES): Costs, Revenues, & Profits: Total Cost (TC): Marginal Cost (MC): Total Revenue (TR): Profit: Shut-down Price: 2. Macroeconomics Macroeconomic indicators help measure the health of a national economy. IB Economics - Paper 3 Tips & Guidance (HL)
Here’s a concise, piece-by-piece “repack” of the IB Economics HL Formula Booklet — focusing on what each formula actually means , when to use it, and common traps. I’ve grouped them by syllabus section.
1. Microeconomics Price Elasticity of Demand (PED) [ PED = \frac{%\Delta QD}{%\Delta P} ]
Repack : If PED < 1 (inelastic), raise price → increase revenue. If PED > 1 (elastic), lower price → increase revenue. Trap : Use absolute value for interpretation, but keep the negative sign for calculation. ib economics hl formula booklet repack
Income Elasticity of Demand (YED) [ YED = \frac{%\Delta QD}{%\Delta Y} ]
Repack : Positive = normal good (>1 luxury, <1 necessity). Negative = inferior good.
Cross-Price Elasticity of Demand (XED) [ XED = \frac{%\Delta QD_x}{%\Delta P_y} ] The IB Economics Higher Level (HL) course relies
Repack : Positive = substitutes. Negative = complements.
Price Elasticity of Supply (PES) [ PES = \frac{%\Delta QS}{%\Delta P} ]
Repack : PES = 0 perfectly inelastic (e.g., stadium seats). PES = ∞ perfectly elastic. Supply: is the intercept and is the slope)
2. Indirect Taxes & Subsidies (per unit)
Tax revenue = tax per unit × quantity sold after tax. Subsidy payment = subsidy per unit × quantity supplied after subsidy. Consumer spending = new price × new quantity. Producer revenue = new price received × new quantity (after tax) or (price paid + subsidy) × quantity after subsidy.