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Ch 6 2.5 Elasticity of demand: complete notes
Neat, exam-ready notebook-style notes for Ch 6 2.5 Elasticity of demand, following the IB Diploma syllabus, SL and HL. This chapter is part of the complete Economics Notes for IB Diploma Students (SL and HL): All 30 Topics.
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Free preview: Ch 6 2.5 Elasticity of demand notes
A quick look at the chapter from our IB Diploma Economics notes. The full chapter notes have the detailed explanations, diagrams and practice questions with answers.
Topics in this chapter
- What you must be able to do
- Price elasticity of demand (PED)
- Degrees of PED: the theoretical range
- Constant PED: three special demand curves
- Why firms and governments care: preview
- Limits of using PED
- Importance of YED AO3
“I can” checklist: what you must be able to do
- I can define elasticity, PED and YED, and give the formulae.
- I can calculate PED from data and also a change in price, quantity or total revenue.
- I can draw relatively elastic and inelastic demand, and constant PED curves (perfectly elastic, perfectly inelastic, unitary).
- I can explain the determinants of PED: substitutes, necessity, share of income and time.
- I can draw and explain how total revenue changes after a price change for elastic and inelastic demand.
- I can discuss the importance of PED for firms and governments, with a judgement.
- I can calculate YED, interpret its sign and size, and draw Engel curves for elastic, inelastic and inferior goods.
- HL: I can explain and draw how PED changes along a straight-line demand curve.
- HL: I can explain why PED is generally lower for primary commodities than for manufactured products.
- HL: I can evaluate the importance of YED for firms and for the sectoral structure of an economy.
What is inside the full chapter notes
- Concept notes with 11 worked examples (every number computed)
- Diagrams: elastic and inelastic D, constant PED, revenue areas, Engel curves, HL straight line
- Importance of PED: indirect taxes and price volatility diagrams
- Common mistakes and a "How to score" command-term box
- 12 Quick-check questions A-D, explained
- Paper 1 style (a) 10 + (b) 15 with mark scheme and markbands
- Paper 2 style data response (36 marks) with mark scheme
- HL Paper 3 style policy question (18 marks) with mark scheme
- Quick reference and "I can" checklist
What you get in the pack
- All 30 topics of IB Diploma Economics for students taking Standard Level or Higher Level (first assessment 2022): what economics is, demand, supply, market equilibrium, behavioural economics, elasticity, government intervention, externalities, public goods, asymmetric information, market power, equity, measuring economic activity, aggregate demand and supply, macroeconomic objectives, inequality and poverty, monetary policy, fiscal policy, supply-side policies, international trade, trade protection, economic integration, exchange rates, balance of payments, sustainable development, measuring development, growth and development strategies
- Every syllabus statement covered in order, each marked SL or HL, with clear notes, tables and diagrams drawn for these notes
- Every diagram the guide names, drawn and labelled, plus worked examples and model answers that show how to earn the marks
- Quick-check multiple-choice questions with explained answers, plus original Paper 1 (extended response), Paper 2 (data response) and, for HL, Paper 3 (policy) style questions with full mark schemes (no past-paper reprints)
- Common mistakes and a how-to-score command-term guide for every topic
- Quick-reference sheet and an "I can" checklist at the end of every topic
- Colour PDF and a black and white copy of every chapter for printing
- Independent notes for IB Diploma students; not endorsed by or affiliated with the International Baccalaureate Organization (IBO)
All chapters in this pack
- Ch 1 1.1-1.2 What is economics? and How do economists approach the world?
- Ch 2 2.1 Demand
- Ch 3 2.2 Supply
- Ch 4 2.3 Competitive market equilibrium
- Ch 5 2.4 Critique of the maximizing behaviour of consumers and producers
- Ch 6 2.5 Elasticity of demand
- Ch 7 2.6 Elasticity of supply
- Ch 8 2.7 Role of government in microeconomics
- Ch 9 2.8 Market failure: externalities and common pool resources
- Ch 10 2.9 Market failure: public goods
- Ch 11 2.10 Market failure: asymmetric information (HL)
- Ch 12 2.11 Market failure: market power (HL)
- Ch 13 2.12 The market's inability to achieve equity (HL)
- Ch 14 3.1 Measuring economic activity and illustrating its variations
- Ch 15 3.2 Aggregate demand and aggregate supply
- Ch 16 3.3 Macroeconomic objectives
- Ch 17 3.4 Economics of inequality and poverty
- Ch 18 3.5 Demand management: monetary policy
- Ch 19 3.6 Demand management: fiscal policy
- Ch 20 3.7 Supply-side policies
- Ch 21 4.1 Benefits of international trade
- Ch 22 4.2 Types of trade protection
- Ch 23 4.3 Arguments for and against trade control and protection
- Ch 24 4.4 Economic integration
- Ch 25 4.5 Exchange rates
- Ch 26 4.6 Balance of payments
- Ch 27 4.7 Sustainable development
- Ch 28 4.8 Measuring development
- Ch 29 4.9 Barriers to economic growth and/or economic development
- Ch 30 4.10 Economic growth and/or economic development strategies