Diagrams

No. Topic Diagram Question

1 1. PPC Diagram:
• PPC illustrating choice and opportunity
cost, unemployment of resources,
actual growth and growth in production
possibilities
• PPC showing increasing versus
constant opportunity cost

3. PPC Diagram: PPC model showing actual

growth and growth in production
possibilities

1. CFI Diagram: circular flow of income model,

with leakages and injections

2. CFI Diagram (HL Only): showing the circular

flow model to illustrate why the free
market results in inequalities

3. CFI Diagram: circular flow of income model

showing the interactions between
decision makers, leakages and
injections

2. DD Diagram: downward- sloping demand

curve

2. DD Diagram: movements along the demand

curve and shifts of the demand curve

3. Unemployment Diagram: showing a fall in the demand

for labour for a particular market or
geographical area

2. PED Diagram: relatively elastic and inelastic

demand

2. PED Diagram: constant PED—perfectly

elastic, perfectly inelastic and unitary
PED along a demand curve

2. PED Diagram (HL only): PED along the

straight line demand curve

2. PED Diagram: showing changes in revenue

as a result of price changes when
demand is price elastic and price
inelastic

2. YED Diagram: showing income elastic,

income inelastic and inferior goods on
an Engel curve

2. SS Diagram: upward-sloping supply curve

2. SS Diagram: movements along and shifts
of the supply curve

2. PES Diagram: relatively elastic and inelastic

supply

2. PES Diagram: constant PES —perfectly

elastic, perfectly inelastic and unitary
PES along a supply curve

2. DDSS Diagram: market equilibrium

2. DDSS Diagram: showing changes in

equilibrium/ role of price mechanism

2. Efficiency Diagram: showing consumer surplus

and producer surplus (social/
community surplus)— maximized at
competitive market equilibrium

2. Policies Diagram: showing the following

(Equity) measures and the possible effects on
markets and stakeholders
• Price ceiling (maximum price)
• Price floor (minimum price)
• Indirect tax
• Subsidy

3. Unemployment Diagram: minimum wage to show

unemployment

2. Efficiency Diagram: allocative efficiency

2. Market Failure Diagram: showing market failure due to:

• negative externalities of production
• negative externalities of consumption
• positive externalities of production
• positive externalities of consumption.

2. Policies Diagram: showing government

(Efficiency) responses to externalities

• Indirect (Pigouvian) taxes

• Carbon taxes showing effects on the
market of a particular polluting industry
• Subsidies
• Legislation and regulation
• Education

2. Perfect Com Diagram (HL only): perfectly competitive

(HL) firm as price taker where,
*P = D = AR = MR

2. Perfect Com Diagram (HL only): perfectly competitive

(HL) firm showing:
• abnormal profit
• normal profit
• losses
2. Perfect Com Diagram (HL only): equilibrium in
(HL) perfectly competitive market with
reference to allocative efficiency when
P = MC or MB = MC, maximum social/
community surplus.
*P = Price, D = Demand

2. Market Power Diagram (HL only): market power where

(HL) AR > MC

2. Monopoly (HL) Diagram (HL only): monopolist showing:

• abnormal profit
• normal profit
• losses

2. Monopoly (HL) Diagram (HL only): price/quantity

comparison of a monopoly firm with a
perfect competitive market. Also
showing welfare loss under the
monopoly.

2. Monopoly (HL) Diagram (HL only): natural monopoly

2. Oligopoly (HL) Diagram (HL only): collusive oligopoly

acting as a monopoly

2. Mono Com Diagram (HL only): monopolistically

(HL) competitive firm showing:
• abnormal profit
• normal profit
• losses

2. Mono Com Diagram (HL only): monopolistic

(HL) competition (with a more elastic
demand curve compared to a
monopoly)

3. Business Diagram: business cycle showing

Cycle short-term fluctuations and long-term
growth trend (potential output)

3. AD Diagram: AD curve

3. AD Diagram: shifts of the AD curve

3. AD Diagram: AD increases showing

increases in real output

3. SRAS Diagram: SRAS curve

3. SRAS Diagram: shifts of the SRAS curve

3. AS Diagram: alternative views of the AS

curve

3. AS Diagram: shifts of the LRAS or

Keynesian AS

3. AS Diagram: LRAS increases showing

increases in full employment output
3. ADAS Diagram: macroeconomic equilibrium in
both the short run and long run

3. Unemployment Diagram: deflationary gap to show

cyclical unemployment

3. Inflation Diagram: demand-pull inflation

3. Inflation Diagram: cost-push inflation

3. Inflation Diagrams: deflation

3. Inflation Diagram (HL only): AD/AS curves

3. Inflation Diagram (HL only): Phillips curve

showing the short-run and long- run
relationship between inflation and
unemployment

3. Equity Diagram: Lorenz curve showing the

distribution of income and possible
changes in the distribution of income

3. Policies (MP) Diagram (HL only): showing the

determination of equilibrium interest
rates

3. Policies (MP) Diagram: AD/AS curves showing

expansionary and contractionary
monetary policy

3. Policies (FP) Diagram: AD/AS curves showing

expansionary and contractionary fiscal
policy for both Keynesian and
monetarist/new classical schools of
thought

3. Policies (EFP) Diagram (HL only): showing the

crowding-out effect

3. Policies (SSP) Diagram: AD/AS model and LRAS

curve to show the effect of supply-side
policies

3. Policies (SSP) Diagram: showing minimum wage

4. Trade Diagram: free trade illustrating exports

when world price is above domestic
price

4. Trade Diagram: free trade illustrating imports

when world price is below domestic
price

4. Trade Diagram (HL only): linear PPC showing

differing opportunity costs and the
potential gains from specialization and
trade as a result of comparative
advantage
4. Protectionism Diagram: showing the effect of a ____
on price, production, consumption,
expenditures, revenues, welfare
• tariffs
• quotas
• subsidies

4. Exchange rate Diagram: showing the exchange rate

determination and changes in
equilibrium in a floating exchange rate
system

4. Exchange rate Diagram: AD/AS curves to show

potential consequences of changes in
the exchange rate on the economy

4. Exchange rate Diagram: showing how a fixed

exchange rate is maintained

4. Exchange rate Diagram: showing the exchange rate

determination and changes in
equilibrium in a managed exchange rate
system

4. Exchange rate Diagram (HL only): on exchange rate

showing the relationship between the
current account balance and the
exchange rate

4. Exchange rate Diagram (HL only): J- curve with

reference to the Marshall Lerner
condition

4. Poverty Cycle Diagram: a poverty cycle showing any

linked combination of factors that
perpetuate poverty
Calculations
No. Topic Calculation Question

1 2. DDSS Calculation (HL only): consumer

surplus and producer surplus from a
diagram

2. PED PED, change in price, quantity

demanded or total revenue from data
provided

2. YED Calculation: YED, change in income,

quantity demanded from data provided

2. PES Calculation: PES, change in price or

quantity supplied from data provided

2. Policies Calculation (HL only): the effects on

(Equity) markets and stakeholders of:
• price ceilings (maximum prices) and
price floors (minimum prices)
• indirect taxes and subsidies.

2. Market Failure Calculation (HL only): welfare loss from

a diagram

2. Market Power Calculation (HL only): profit, MC, MR,

AC, AR from data

3. KEI Calculation: [nominal] GDP from sets of

national income data, using the
expenditure approach

3. KEI Calculation: [nominal] GNI from data

3. KEI Calculation: real GDP and real GNI,

using a price deflator

3. KEI Calculation: real GDP per capita and

real GNI per capita

3. Unemployment Calculation: the rate of economic

growth from a set of data

3. Unemployment Calculation: the unemployment rate

from a set of data

3. Inflation Calculation (HL only): a weighted price

index, using a set of data provided

3. Inflation Calculation: the inflation rate from a set

of data using quantities purchased as
weights in the CPI

3. Equity Construction (HL only): a Lorenz curve

from income quintile data

3. Equity Calculation (HL only): given the indirect

tax rate, the amount of indirect tax paid
 from a given level/ amount of
expenditure

3. Equity Calculation (HL only): total tax and

average tax rates from a set of data

3. Policies (MP) Calculation: real interest rates from

given data

3. Policies (FP) Calculation (HL only): Keynesian

multiplier

3. Policies (FP) Calculation (HL only): the effect on

GDP of a change in an injection in
investment, government spending or
exports, using the Keynesian multiplier

4. Trade Calculation (HL only): from a diagram,

the quantity of exports, quantity of
imports, import expenditure, export
revenue

4. Trade Calculation (HL only): opportunity costs

from a set of data in order to identify
comparative advantage

4. Protectionism Calculation (HL only): from a diagram,

the effects on stakeholders of the
following:

• tariffs
• quotas
• subsidies

4. Exchange Rate Calculation: using exchange rates, the

price of a good in different currencies

4. Exchange Rate Calculation: changes in the value of a

currency from a set of data

4. Balance of Calculation: elements of the balance of

payment payments from a set of data
Policies
No. Topic Policy Question

1 2: DDSS Equity N2017

N2019

2 2: Market Externalities Specimen

Failure

3 2: Market Information • Choice architecture—default, restricted, and mandated choices

Failure Failure • Nudge Theory

4 2: Market Market Power

Failure

5 3. Macro Economic N2019

Growth

6 3. Macro Unemployment

7 3. Macro Inflation N2017

8 3. Macro Equity N2016

9 4. Global Current N2020 Explain two methods that a government could use to correct a
Account deficit persistent current account deficit. [4]

M2018

Specimen

10 4. Global Economic
Development