If TOT improves, a country can import more for the same volume of exports. However, watch out for worsening current account if demand for exports is elastic.
Paper 3 is entirely dedicated to quantitative methods. Beyond the formulas, you must know how to manipulate linear equations. Linear Demand and Supply Functions
These formulas often appear in Paper 2 data response questions and the HL-only Paper 3 extension questions. ib economics hl formula booklet repack
Marginal Cost (MC)=ΔTCΔQMarginal Cost (MC) equals the fraction with numerator cap delta TC and denominator cap delta cap Q end-fraction Profit Metrics Profit Maximization Rule: Firms maximize profit where Revenue Maximization Rule: Firms maximize revenue where (coinciding with Unit 3: Macroeconomics
Macroeconomic math focuses on measuring national income, modeling economic activity, and evaluating the impacts of fiscal policies. 2.1 Measuring Economic Activity If TOT improves, a country can import more
Understand why a calculation behaves a certain way based on market structures or macroeconomic policies.
Opportunity Cost of Good A=Output of Good BOutput of Good AOpportunity Cost of Good A equals the fraction with numerator Output of Good B and denominator Output of Good A end-fraction Beyond the formulas, you must know how to
Inflation Rate=CPI2−CPI1CPI1×100Inflation Rate equals the fraction with numerator cap C cap P cap I sub 2 minus cap C cap P cap I sub 1 and denominator cap C cap P cap I sub 1 end-fraction cross 100
[ \textXED = \frac%\Delta QD \text of Good A%\Delta P \text of Good B ] Repack Annotation: XED positive → substitutes (Coke/Pepsi). XED negative → complements (Printers/Ink).
The IB generally expects you to round your final answers to two decimal places, unless the question specifies otherwise. Avoid rounding any intermediate steps, as this can lead to a slightly inaccurate final answer.