Tackling the IB Economics Examination

By the time this page is finished, all IB candidates sitting the May 2013 examinations (me included) would have finished their Economics exams (and possibly all their other exams). As many of you would have known by now, starting from this year, the format of each paper is different. So this page is dedicated to future IB Economics candidates so that when you enter the exam room on the fateful day, you are 100% certain on:

1. The Examination Techniques

2. The common but effective points

3. Key important tips to use during the exam

Paper 1

Paper 1 is probably the most daunting and most difficult of the 3 econ exams, yet it is the first one you will face when you come to take your IB exams. To remind you of the structure of this paper, take a quick look below:

• Allocated Examination time: 1 hour 30 mins
• Syllabus Sections: Micoeconomics (Section A) and Macroeconomics (Section B)
• Questions: Choose 1 question out of 2 from each section
• Question Type: Essay Part question : Part (A) 10 marks,  Part (B) 15 marks
• Exam Weighting: 30%

The most difficult aspect of this paper is not the knowledge they test you on, but the time constraint. In the past, the IB allows you 1 hour for 1 question, now they only give you 45 minutes per question. With so little time available on your hands, and if you are someone with painfully slow hand-writing speed such as I, you may not have enough time to go to the toilet or even check your work towards the end of the exam. Furthermore, it must be noted that sacrificing clarity of  your written work for speed may not necessarily be an advantageous thing to do because...well if the examiner can't read what you are writing, they would not be able to interpret and mark your work.

So there are many factors that could have significant effects on the quality of your written response. Here are a few essential targets that you should aim to accomplish on the day:

• Write at least 7-8 pages, including diagrams
• Aim to include at least one diagram for every part question
• Provide at least one real world example relevant to each particular question

Key Tips and Important Points on answering Paper 1 Questions

1. Approach the questions in a straightforward manner
   Usually in essays, we tend to 'bs' excessively (especially in English lit. Paper 1). However, you cannot do that in particular this exam. The simplest and easiest way is to explicitly answer the question, then support your answer with diagrams, explanation etc.
2. Define 'ALL' relevant economic terms
   Start all of your responses by defining all the economic terms stated in the question; this guarantees that you wouldn't forget while you are under pressure cramming in the other stuff. Any other economic theory you mention should be included within your analysis.
   
   E.g. May 2013 Microeconomics Question 1 Part (A)
   "Distinguish between decreasing returns to scale and diminishing returns."
   Opening definitions: Decreasing returns to scale, law of diminishing marginal returns
   Definitions within analysis: *Short run, *Long run, Marginal Product
   *Very important definitions because it distinguishes the two theories
3. Part (A) Knowledge / Part (B) Evaluation
   Part (A) questions focus on testing your knowledge (these questions would be advantageous to bookworms), and your answering of the question. It is imperative that you explicitly answer the question.
   
   E.g. May 2013 Macroeconomics Question 3 Part (A)
   "Describe and explain how the government could close a deflationary gap."
   
   Part (B) however, tests your 'economic sense' to be able to evaluate the extent to which certain policies will affect different stakeholders and aspects of the economy. Evaluations would come in the form of:
   - "To what extent does "_____________"  affect "____________"?" or- "Evaluate the extent to which "____________" may "_________________"."
   These types are the most troublesome, as the evaluation points can be very broad. Ideas can range from the degree of the policy (e.g. how much interest rates increase) to its effects on different stakeholders and criticism of the theory itself (e.g. perfect competition does not exist, can allocative efficiency ever be achieved in the free market?)
   
   E.g. November 2010 Question 3 Part (B)
   "Evaluate the extent to which a depreciating exchange rate may benefit or harm an economy."
   
   - "Compare and Contrast "e.g. market structure 1" and "e.g. market structure 2".
   If these type of evaluation questions come up, I would recommend that you  go for it because it is much more easier to do your evaluation. In this case, the keywords 'compare' and 'contrast' indicates the type of evaluation you should be doing, no need waste time thinking up of other bs.
   
   E.g. May 2013 Microeconomics Question 1 Part (B)
   "Compare and contrast the market structures of Perfect Competition and Monopoly"
   
   Sometimes the IB may ask some questions that do not actually require any explicit evaluation, or is very unorthodox. These questions are paradoxical; you are always told by your IB teacher to evaluate in part b), but the question asks you to respond in a way that does not actually need you to evaluate. Here comes the IB's tricky little magic; what seems like knowledge is actually evaluation. This will turn into a swim or sink situation; kill or be killed, there is no middle ground. Your knowledge in the written response has to be absolutely spot on to attain the highest mark band, but if it's off by a bit, it would cost your mark dearly. So what should you do in this situation? That will depend on your own capability.
   
   E.g. May 2013 Macroeconomics Question 3 Part (B)
   "Discuss why compared to the New-Classical (Monetarist) model, the Keynesian Model may remain in a deflationary gap in the long-run?
4. Time yourself
   You should allocate the right amount of time to each question. Don't spend too long on one particular question, as you will have less time for other questions. Depending on the number of marks, you should spend around 18 minutes on Part (A), and 27 minutes on Part (B).

Evaluation Techniques
Evaluation is definitely the toughest part of any of the economics exams. As aforementioned, you could go absolutely mental in your evaluation, thinking of unique, or incredulous evaluation points. For those that are getting headaches over evaluation, you should try to remember the S.M.A.R.T. rule. This rule would enable you have foolproof evaluation points to use on the day when you are stuck.

S.M.A.R.T.

1. Stakeholder Groups
   Consumers
   Producers
   Government
   Society/Public
   
   *It is better to write down more specific stakeholder groups to better show the examiner that your answer covers the context of the question.
2. Magnitude
   Think how much "___________" changes in relation to the impacts of the policy
   E.g. Taxation, Interest Rates, Subsidies, Demand and/or Supply, Government Spending, FDI
3. Advantages/Disadvantages
   What are the advantages and disadvantages of the solutions that the question proposes?
   Are there any other solutions you could think of that may work better?
4. Real World Application
   Does the feasibility of your policy differ between different countries?
   E.g. Expansionary fiscal policy is not entirely possible in the debt-stricken economies in the monetary union Eurozone.
5. Time and Type-Short Term Vs Long Term effects
   -Time Lag between implementation of the policy and the effect on the economy
   
   Policy may be effective to a particular type of economic situation
   E.g. Demand-side policies affect Demand-Pull Inflation, but does not cure Cost-Push Inflation
          Type of Unemployment

Paper 2

Paper 2 in comparison to Paper 1 is easier because the questions are split into 4 parts. Paper 2 is a data response paper, which is equivalent to the original paper 3. Of the 3 econ exams, it is second in difficulty. To remind you of the structure of this paper, take a quick look below:

• Allocated Examination time: 1 hour 30 mins
• Syllabus Sections: International Economics (Section A) and Development Economics (Section B)
• Questions: Choose 1 question out of 2 from each section
• Question Type: Short + Long Part question:
  Part (A) (i) and (ii) 2 marks definitions and/or statement questions - Total 4 marks
  Part (B) and (C) 4 mark short answer questions
  Part (D) 8 mark evaluation questions
• Exam Weighting: 30%

Unlike paper 1, time constraint is not the biggest obstacle but rather your ability to analyze articles purposefully and effectively. However that is not to say that timing is not important; in fact it is the key strategy for this paper.

Key Tips and Important Points on answering Paper 2 Questions

1. 3 Minutes Maximum for Part (A) questions
   Part (A) will consist of either two definitions, two statement questions, or one of each. You should aim to spend no more than 3 minutes on part (A) definitions. Remember to learn your definitions and remember them like the back of your hand. Sure, there may be some awkward ones that you may not bother remembering like Infrastructure in this year's paper, but it is vital that you meet the target time.
2. Reference the text
   Many people are able to pick out information  from the text/article and then analyze it, but they always forget to reference the text, which will cost them marks. Paper 2 is data response, so it only makes sense if you do it. You can either quote the article, or just reference the line number. It will only take a few moments, but it will make noticeable difference to the quality of your paper.
3. Strategy: Obtain the first 12 marks
   Obtaining the first 12 marks (part a, b, and c) is a priority for this paper. For these short answer responses, you can actually get full marks, but evaluation questions are not as prudent or rewarding. Examiners never actually award full marks for any econ essay unless it is truly impressive, so to maximize your marks, you have to aim to get 12 out of 12, so even if you achieve 6/7 for the evaluation question, you would still receive a decent score.

Strictly allocate 45 minutes per question. It is recommended that you spend around 20 minutes on the 8 mark question, because the analysis and evaluation requires more time. That leaves around 11 minutes per 4 mark question, which should be sufficient.


Paper 3

Without a doubt, paper 3 is the easiest IB economics paper. Simple, straightforward calculations that even primary school students could manage, you should absolutely ace this paper. This paper could potentially be your one way ticket from a level 5 to a level 7 (only if you ace it though!). 

• Allocated Examination time: 1 hour
• Syllabus Sections: Microeconomics, Macroeconomics, maybe International Economics
• Questions: Choose 2 questions out of 3
• Question Type: Numerical and 4 mark Short answer theory questions
  Examples:
  -*Find equilibrium price and quantity demanded
  -*Graphing demand and supply curves
  -Theory of the firm (Costs/ Revenues/Profits in different market structures)
  -Direct and Indirect Taxation calculations
  -Inflation and CPI
  -Unemployment rates
• Exam Weighting: 20%

The questions with an asterix (*) should be present in all the future paper 3 exams.

There are many variety of questions that the exam tests you on, plus the fact that this is the first ever paper of its kind, so I am unable to fully ascertain the information of the type of questions they test you on. However, the structure is somewhat discernible depending on the area you choose.

Please be warned however, although the paper may look extremely easy, it comes back to bite you on your behind with its inexplicable need for precision, and exam technique. That's right, exam technique is the key for such papers.

Key Tips and Important Points on answering Paper 3 Questions 

1. Always show your working out
   Even though the level of maths is so easy that you could just write down the answer, and not to mention the urge to quickly finish the 1 mark questions, you have to show working out to get the calculation marks. The IB is aware of the low level of maths, so they are more interested in how you arrive to your answer.
2. Explicitly state numbers as evidence for 4 mark questions
   Generalizing your explanations is not very good. You cannot get into the top mark band without using numbers from the previous calculations. If the questions asks you to explain the theory, you should include both a qualitative and quantitative explanation. For example, if the question asks you to explain price elasticity of demand changes along the demand curve, you should calculate and compare the PED value at high and low prices.
   
   Example:As a result of the health scare, the quantity of beef demanded has decreased by X from A to B from the inward shift of the demand curve. Assuming that the supply of beef does not change, there would be an excess supply X of beef at the original equilibrium price of Y. In order to eliminate the excess supply of beef, there will be a contractionary movement along the supply curve to establish a new equilibrium at price Z and quantity B.
3. Graphing Technique 1: Plot first and last points
   You should aim to get the calculations and graphing out of the way as soon as possible so you can spend more time on writing the 4 mark questions. You can do this by accurately plotting the first and last points, then join them together. Because the 'curves' are straight-line functions, you should find that  all the points line up perfectly.
4. Graphing Technique 2: Use coordinates
   There will be questions that ask you to show equilibrium points and when the lines meet the axes. Writing down the coordinates of the intersections is the easiest, foolproof way to guarantee marks.
   E.g. Q(55,0), P(6,0)
   
   
   
   
   

   5. *Read the description carefully

   Many people often get tricked by the number of units of the good. Most of the time, the good will be sold in thousands of units. In your calculations, if you write '6' instead of '6000', you won't get any marks even if your graph shows '6'. Thankfully, the May 2013 paper integrated the units into the demand and supply functions, but prepare yourself for the worst case scenario.
   
   

Diagrams: Getting the basics right
It is not an exaggeration to say that diagrams are the most important part of your written response. People who focus on perfecting their diagram, although their knowledge may not be as refined, may do better than those who are more knowledgeable, but make careless errors on their diagram. Apart from obviously drawing your diagrams intricately and correctly, you should understand that the 'whole' diagram is a combination of many different 'parts'. So remember this: "perfection comes from doing every little thing well." I know this sounds cheesy, but it is a good philosophy to follow.

This is my preferred steps to drawing my diagrams, but it is your choice whatever order to wish to draw your diagram in:

1. Draw axes with arrows
2. Complete the essential features within your diagram (E.g. Curves/Lines, Dotted lines, shaded areas etc.)
3. Give your diagram an appropriate title (E.g. Effect of demand-pull inflation on 'XXX's' Real Output)
4. Label the components of your axes (E.g. Title/Name of axes, P's and Q's etc.)
5. Label all the features in your diagram
6. Give your diagram a figure number (E.g. Figure 'X') below:
   main purpose is to enable you to easily refer to the diagram when explaining, and for the examiner to reference your explanations to the diagram. Killing two birds with one stone!

*Remember to always use a pencil and a ruler

Final Reminders

• Get enough SLEEP
  Sleep improves cognitive function and capability; which is unmistakably important when you come to do your exams. It is recommended that you get at least 7 hours sleep (though IB students often sleep fewer hours than this).
• Drink more water
  Rather than coffee or red bull, drink more water. Keeping your body hydrated is more important than downing can after can of stimulants. 
• Practice makes perfect
  Revising without actually doing past papers is not good. Practice writing essays within the time limit will enable you to get accustomed to the examination conditions. And as an added bonus, by looking and understanding how to answer particular questions, you will know how and what to answer if similar questions pop up, hence your structured response will be much more coherent.

Hopefully some of these tips would be of some help to many of you future candidates! I would like to take this time to Thank You all for your continued support, and I wish future candidates the best of luck when you take your exams!