IB Economics Guide: SL & HL Explained

Ignacio is an IB Economics expert. He has been an IB Examiner for Economics since 2018 and teaches the IB Economics HL course on the IB-accredited Pamoja online platform. Ignacio knows both Economics SL and HL inside-out from the Internal and External components as well as the Extended Essay in this subject. You can book tuition with Ignacio here.

Article updated and reviewed by Ignacio, insert date of posting

Considering IB Economics? Whether you’re weighing up SL versus HL or simply curious about what the subject covers, this guide will help you understand it clearly. From internal assessments to exam techniques, IB Economics tutor Ignacio lends his insight and expertise so you have everything you need to succeed in the course and gain skills far beyond the classroom.

What Is IB Economics and What Does It Teach?

IB Economics is part of Group 3: Individuals and Societies in the IB Diploma Programme. It’s a subject that explores how individuals and societies use scarce resources to meet the needs and wants of people. The IB Economics syllabus is designed to help you understand how the real economy works, both nationally and globally.

You’ll study core theories, use diagrams to represent ideas, and analyse key issues like poverty, unemployment, inflation, and sustainability. But more than that, you’ll learn how to evaluate decisions, think critically about policy, and explain economic problems clearly.

Key concepts: scarcity, choice, efficiency

The course is structured around nine key concepts, but these three form the foundation of everything you’ll study:

Scarcity: Resources are limited, yet human wants are unlimited. This basic economic problem drives the need for decisions in every society.
Choice: Since we cannot have everything, we must choose how scarce resources are allocated.
Efficiency: Economies aim to maximise output and minimise waste when using their limited resources.

These concepts come up repeatedly in discussions, exam papers, and your internal assessment.

Relevance to real-world issues and careers

IB Economics helps you make sense of the world. You’ll study how policies impact everyday life, how countries trade, and why governments struggle to meet everyone’s needs. This real-world focus makes it an excellent choice if you’re interested in:

Economics, politics, or business at university
Careers in finance, policy-making, consulting, international development, or law
Learning how to analyse and solve problems with both logic and empathy
Training yourself to understand contemporary real-world issues, their causes, and possible implications, as the ones you can see every day online or in the news.

You’ll also develop valuable research, communication, and diagramming skills across many disciplines.

IB Economics SL vs HL: What’s the Difference?

Standard Level (SL) and Higher Level (HL) follow the same core structure, but HL students go deeper and take an extra exam paper. In order to choose between the two, Ignacio says to consider your academic strengths, future goals, and how much time you can commit.

Additional HL topics and paper format

HL students cover everything in the SL syllabus but go further with an additional paper (Paper 3), which focuses on quantitative analysis and policy evaluation. They also have about 90 more teaching hours, and the final grade is weighted slightly differently: 80 percent from exams and 20 percent from the internal assessment.

HL Extension: Theory of the Firm

One of the unique HL topics is the Theory of the Firm. This explores how businesses make decisions under different market conditions. You’ll study:

Production, revenues, costs, and profits
Perfect and imperfect competition (Monopolies, Oligopolies, and Monopolistic competition)
Price discrimination and non-price competition
Efficiency and welfare loss

This topic is quite technical and requires strong diagramming and evaluation skills. However, Ignacio says it is a good choice if you are interested in pursuing an Economics or business-related career, due to the strong conceptual foundation you will gain.

Choosing between SL and HL based on your goals

To help you decide, go for HL if you’re confident with maths, interested in digging deeper into economic theories, and planning to study economics or business at university. SL is an excellent option if you want a clear understanding of economics without HL’s extra challenge or time demands.

Both SL and HL are academically rigorous and valued by universities. How well you engage with the course and prepare for the assessments matters more.

Core Themes in the IB Economics Syllabus

The IB Economics syllabus is divided into four main areas. Each includes theory, real-world examples, and analytical tools like diagrams and data.

Microeconomics: Market forces and failure

This unit focuses on how prices are set, how markets operate, and where they sometimes fail. Key topics include demand and supply theory, elasticities (responsiveness or sensitivity) of demand and supply, market failure and externalities (like pollution), as well as government interventions, such as taxes and subsidies.

You’ll learn to analyse and evaluate when markets work well and when they don’t, along with potential policy solutions.

Macroeconomics: Growth, inflation, and policy tools

Macroeconomics takes a broader view of the economy. You’ll study:

National income and GDP
Employment, unemployment, and inflation
Economic growth and the business cycle
Equity and inequity in the distribution of national income.
Fiscal and monetary policy tools

You’ll explore how governments manage the economy and balance competing goals. At the same time, Ignacio points out, you will understand better one of the most influential and spread theoretical disputes of modernity, Keynesianism vs. Neoclassical perspectives.

International economics: Trade and exchange rates

This unit is especially relevant in today’s global economy. Topics include benefits and drawbacks of international trade, trade protection policies (if you are curious about how tariffs work, this is the place to learn about them), exchange rate systems (fixed, floating, and managed), as well as balance of payments (a registry of all international transactions) and current account issues.

Understanding global economics will help you follow international news more closely and make sense of trade conflicts or currency changes.

Development economics: Strategies for global equity

The second part of the final unit is, according to Ignacio, perhaps the most interesting of them all, as it explores the challenges facing developing countries and efforts to reduce inequality. Topics include development indicators (like HDI, literacy, access to health care), barriers to development (debt, corruption, trade barriers), as well as aid, foreign direct investment, and sustainable development.

This is where economic theory meets ethics and global responsibility.

Internal Assessment (IA): Commentaries on Real-World News

The IB Economics internal assessment involves writing three commentaries (around 800 words each) based on recent news articles. Each must focus on a different area of the syllabus.

How to choose articles

Selecting the right articles is key to writing strong IB Economics commentaries. Aim for sources that provide enough context to apply economic theory effectively.

Use credible news outlets such as BBC, The Economist, or Reuters
Make sure the article was published within the past 12 months
Avoid opinion pieces or reports that are too short or overly technical

Choose articles that connect to syllabus topics and provide real-world situations to analyse and evaluate.

Criteria for top marks

To score well on your IB Economics internal assessment, each commentary needs to be clear, well-structured, and strong grasp of theory and application. Focus on the following elements:

Use labelled diagrams to support your explanation visually. Please ensure they are accurate, clearly drawn, and directly linked to the article.
Apply the correct theory to the real-world example in the article. Show that you understand how the theory works and why it’s relevant.
Use economic terms accurately and precisely throughout your writing. Avoid vague language and show confidence with subject-specific vocabulary.
Evaluate the situation using the CLASPP method (Conclusion, Limitations, Assumptions, Stakeholders, Priorities, Pros and Cons). This structure helps you present a balanced and thoughtful analysis.
Keep your commentary concise, focused, and within the 800-word limit. Avoid unnecessary background or repetition. Stick to clear, purposeful writing.

Meeting these criteria shows the examiner that you can think like an economist and communicate your ideas effectively.

IB Economics Exam Papers Explained

SL students take two papers while HL students take three. Each of these is designed to assess different skills.

Paper 1: Essay questions

Paper 1 is a 1 hour 15 minute essay exam where you answer one of three questions, testing definitions, diagrams, theory, and evaluation. Clear structure and real-world examples are key to a strong response.

“Although there is no predesigned format for this paper, it is very useful to practice with past papers, creating essays and contrasting them with the mark schemes. An experienced tutor could be helpful at this stage”, comments Ignacio.

Paper 2: Data response

Paper 2 is 1 hour and 45 minutes long and involves answering one of three data-based question sets. It tests your analysis, evaluation, and diagram skills, with calculator use allowed for numerical tasks.

Ignacio emphasises that, “Here, precision in answers and appropriate time management, along with comprehensive reading and data usage, are fundamental.”

Paper 3: HL quantitative paper

Paper 3 is 1 hour 45 minutes long, with two compulsory questions testing your calculation skills (math requirements are relatively easy, but conceptual understanding must be solid), policy evaluation, and critical thinking skills. Regular, timed practice is key to performing well.

Understanding the format and focus of each IB Economics exam paper helps you prepare more effectively and approach the assessments with greater confidence.

How to Study and Revise for IB Economics

Success in IB Economics depends on consistent effort and smart study strategies.

Understand theories, don’t memorise

Explain economic ideas in your own words to build a deeper understanding. Use flow diagrams to break down processes, flashcards to review key terms, and pair or group discussions to test your thinking. This approach makes it easier to apply theory flexibly during exams.

Use real-world examples in essays

Where possible, support your points with real-world events such as the UK’s interest rate changes, global inflation after 2020, or tariffs on Chinese exports. These examples make your answers more engaging, relevant, and persuasive.

Practice with past paper questions

Nothing prepares you better than practising real exam questions. Time yourself, write full answers, get feedback, and note areas to improve. Examiner reports are also helpful in understanding what IB examiners look for.

Consistent practice, a clear understanding of theory, and using real-world examples are key to effective IB Economics revision.

Best Resources for IB Economics Students

Plenty of helpful tools are available to support your learning in IB Economics. Here are some of the most effective ones:

Oxford IB Economics Course Companion: This textbook is aligned with the current syllabus and offers clear explanations, well-organised chapters, and helpful examples that break down complex topics in a way that’s easy to follow.
EconplusDal on YouTube: A favourite among IB students, this channel features short, focused videos that explain IB Economics key concepts, walk through diagrams, and provide real-world applications all in a student-friendly format.
Past paper repositories: These are often shared by teachers or your school’s learning platform. Practising with actual exam questions and reviewing mark schemes is one of the best ways to prepare.

Rather than jumping between too many resources, choosing two or three that suit your learning style is better. It’s also important to use them consistently throughout the course.

Final Thoughts: Balancing Theory, Application, and Clarity

IB Economics is a subject that blends logic, curiosity, and real-world thinking. Whether you’re exploring inflation, international trade, or issues of global poverty, the insights and skills you develop will stay with you beyond your final exams.

Success in IB Economics comes from striking the right balance between theory and application. Grasp the key concepts and use clear, accurate diagrams to support your explanations. Working steadily throughout the course will help reduce stress and build long-term confidence.

TutorsPlus provides personalised lessons with expert IB Economics tutors, like Ignacio, who understand the syllabus inside out.

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With the right mindset and support, you’ll be in a strong position to succeed and make the most of everything IB Economics has to offer. Feel free to reach out to us at or call 022 731 8148 for customised, one-on-one support designed around your academic needs.