Maya frowned. “But sir, Economics isn’t about formulas. It’s about people, markets, and governments.”
The booklet provides the standard formula: $$ PED = \frac%\ change\ in\ quantity\ demanded%\ change\ in\ price $$ ib economics hl formula booklet
The formula booklet provides $AD = C + I + G + (X - M)$. Students often list these components in Paper 1 essays but fail to apply the quantifiable link in Paper 3. For instance, if taxes ($T$) rise, consumption ($C$) falls. The formula for the Multiplier with taxes ($k = \frac11 - c(1-t)$) is complex and often requires derivation rather than direct booklet referencing, testing the student's deeper understanding. Maya frowned
Would you like a printable of the exact formulas from the booklet, grouped by exam question type? Students often list these components in Paper 1
| Concept | Formula | |---------|---------| | PED | (%ΔQd) / (%ΔP) | | YED | (%ΔQd) / (%ΔY) | | XED | (%ΔQd good A) / (%ΔP good B) | | PES | (%ΔQs) / (%ΔP) | | Tax revenue | Tax per unit × Quantity after tax | | Consumer surplus (CS) | ½ × (max price − equilibrium price) × equilibrium Q | | Producer surplus (PS) | ½ × (equilibrium price − min price) × equilibrium Q | | Price floor/ceiling effects | Shortage/Surplus calculations (using linear demand/supply) |
Real exchange rate = (Nominal exchange rate × Domestic price level) / Foreign price level