Key Concepts for IB Economics Internal Assessment 2025

Overview

Understanding the key topic reflected in the IB Economics IA is key to maximise the number of marks. Below are the 9 concepts that IAs for Macroeconomics, Macroeconomics and Global Economy should fit under:

• Well-being
• Independence
• Scarcity
• Efficiency
• Choice
• Intervention
• Change
• Equity
• Sustainability

** Quick tips:

• Use the keyword itself (e.g. scarcity) at least three times: once in the introduction, once in the conclusion and at least once in the analysis and evaluation part
• Use the definitions below to really understand the concept so you can apply it accordingly

Definitions

Scarcity

Scarcity refers to the fundamental economic problem of having limited resources to meet unlimited wants and needs. It forces individuals and societies to make choices about how to allocate resources efficiently. Understanding scarcity is crucial for analyzing how choices are made in an economy and how resources are allocated. It underpins the study of supply and demand, as well as the decision-making processes in economics. 

 

Choice

The Key Concept of Choice revolves around deciding between alternatives given the constraint of scarce resources. It reflects the decisions individuals and governments make about how to allocate resources to satisfy different needs and wants. This concept is central to understanding consumer behavior, market mechanisms, and policy-making. It helps in analyzing trade-offs and opportunity costs in economic decisions.

Efficiency 

Efficiency refers to the optimal use of resources to achieve the best possible outcome. Understanding efficiency is essential for evaluating how well resources are used in different economic systems and for assessing the effectiveness of various policies and measures. 

Equity

This Key Concept focuses on fairness and the distribution of economic benefits and burdens. It addresses questions of how wealth and resources are distributed. This Key Concept helps analyze issues related to income distribution, social justice, and the impact of economic policies on different segments of society. It’s crucial for evaluating the social implications of economic decisions. 

Economic Well-Being

Economic well-being refers to the overall health and quality of life within an economy. It encompasses factors like income levels, employment rates, access to essential services, and overall living standards. Understanding this Key Concept allows students to assess the success of economic policies in improving people’s lives. 

 

Sustainability 

The Key Concept of Sustainability involves managing resources and economic activities in a way that meets current needs without compromising the ability of future generations to meet their own needs. Students learn about this concept as it is essential for evaluating how economic practices impact the environment and society in the long term.

 

Change

Change refers to the shifts and developments within an economy, such as technological advancements, policy reforms, and shifts in consumer preferences. It involves how economies adapt and evolve over time. Understanding change is crucial for students as it equips them with the skills needed to analyse how economic systems respond to challenges. 

 

Interdependence 

This Key Concept describes how economic entities, such as individuals, businesses, and countries, are interconnected and rely on each other. This concept is therefore crucial for an in-depth understanding of Economics in the broader context.

 

Intervention 

The Key Concept of Intervention refers to the actions taken by governments or other authorities to influence or correct economic outcomes within a market. Students learn about this concept in order to understand how and why governments step in to shape economic activity. It helps students evaluate the effects of policy measures on markets, consumers, and overall economic performance