Terms of Trade=Index of Average Export PricesIndex of Average Import Prices×100Terms of Trade equals the fraction with numerator Index of Average Export Prices and denominator Index of Average Import Prices end-fraction cross 100 Step-by-Step Problem Solving Framework
: Always draw the diagram mentally – who gets the subsidy incidence?
Average Revenue (AR)=TRQ=PAverage Revenue (AR) equals the fraction with numerator TR and denominator cap Q end-fraction equals cap P
Write out the raw algebraic equation before inserting any values. This guarantees partial working marks.
An increase in the value signifies an improvement in the terms of trade (more imports can be bought per unit of exports); a decrease signifies a deterioration. Paper 3 Exam Blueprint & Strategy ib economics hl formula booklet repack
She had to memorize every equation herself—from the linear demand function to the complex Marshall-Lerner condition used in international trade. The Discovery: The "Repack" While browsing student forums like
Next to PED, write: "If PED < 1, price up → revenue up." Next to multiplier: "Add MPS, MPT, MPM in denominator." Next to tax burden: "Draw the D/S graph mentally."
To find the value of one unit of foreign currency in domestic terms:
Average Total Cost (ATC)=TCQ=Average Fixed Cost (AFC)+Average Variable Cost (AVC)Average Total Cost (ATC) equals the fraction with numerator TC and denominator cap Q end-fraction equals Average Fixed Cost (AFC) plus Average Variable Cost (AVC) Terms of Trade=Index of Average Export PricesIndex of
, Maya found what other students called a "repack". This wasn't just a list of numbers; it was a curated, high-quality collection of organized notes and definitions designed to help students hit the "Grade 7 standard". Maya’s new "repack" booklet included: Microeconomics Essentials : Profit maximization where
[ \textMultiplier (k) = \frac11 - \textMPC ] Repack Expansion: [ k = \frac1\textMPS + \textMPT + \textMPM ] Where MPS = Marginal Propensity to Save; MPT = Marginal Propensity to Tax; MPM = Marginal Propensity to Import.
GDP=C+I+G+(X−M)GDP equals cap C plus cap I plus cap G plus open paren cap X minus cap M close paren Where: = Consumption, = Investment, = Government Spending, = Exports, = Imports.
MPC = 0.75, MPT = 0.1, MPM = 0.05. Government increases spending by $40 million. Calculate total increase in GDP. An increase in the value signifies an improvement
CS=12×Base×Height=12×Q*×(Pmax−P*)CS equals one-half cross Base cross Height equals one-half cross cap Q raised to the * power cross open paren cap P sub max end-sub minus cap P raised to the * power close paren
XED=%ΔQDA%ΔPBcap X cap E cap D equals the fraction with numerator % cap delta cap Q cap D cap A and denominator % cap delta cap P cap B end-fraction TR=P×Qcap T cap R equals cap P cross cap Q 2. Microeconomics: Theory of the Firm (HL Only)
The PPC illustrates the maximum potential output combination of two goods an economy can produce given fixed resources and technology.