IB Economics: Introduction to Economics Revision

Introduction to Economics is a core part of IB Economics. Revise the key concepts and common mistakes below, then lock them in with the free games.

Key concepts

Comparative advantageCountry specialises where opportunity cost is lower; trade mutually beneficial (Ricardo 1817).

Heckscher-OhlinCountries export goods using their abundant factors intensively (Heckscher 1919; Ohlin 1933).

TariffTax on imports; raises domestic price, reduces consumer surplus, deadweight loss in small open economy.

QuotaQuantitative limit on imports; raises price; revenue accrues to license holders, not government.

World Trade OrganizationEstablished 1995, successor to GATT 1947; multilateral rules and dispute settlement among 164 members.

Trade warSequence of retaliatory protectionist measures; US-China tariffs from 2018 most prominent recent case.

Questions where students often pick the tempting wrong answer — make sure you know the right one:

What does economic scarcity mean?✗ Simply that something is rare. ✓ Unlimited wants exceed limited resources, forcing choices.

What is opportunity cost?✗ Only the money price of an item. ✓ The next best alternative given up when you make a choice.

Test yourself with these quick revision games for this topic: