IB Economics Paper 1 | 200 Essay Writing Words

Use these 200 IB Economics Paper 1 words to explain economic models, apply real-world examples and make a supported evaluation. Each entry includes a meaning and a short usage example.

IB Economics Paper 1 is a 1 hour 15 minute extended-response paper at SL and HL. Choose one question from three and answer both parts. Part (a) is worth 10 marks and Part (b) 15 marks.

The 200-word list

1–20 Real-world policy examples and evaluation · 21–40 Microeconomic analysis · 41–60 Macroeconomic analysis · 61–80 Taking a position · 81–100 Using evidence and reasoning · 101–120 Connecting ideas · 121–140 Explaining cause and effect · 141–160 Comparing options and weighing costs · 161–180 Public decisions and evidence · 181–200 Describing scale and change

Exam requirements · Worked response · Worked analysis · Fencing Method · Practice and FAQs · Practice workshop

1–20 Real-world policy examples and evaluation

equity — fairness in how outcomes or opportunities are distributed. evaluate equity as well as efficiency.
sustainability — the capacity to continue without undermining future resources or wellbeing. consider the sustainability of current consumption.
interdependence — mutual reliance between people, sectors or economies. trade creates interdependence across economies.
intervention — action by government or another authority to influence an outcome. evaluate the rationale for market intervention.
economic wellbeing — material and broader conditions that influence people’s economic lives. evaluate the effect on economic wellbeing.
stakeholder — a person or group with an interest in an outcome. compare the effects on different stakeholders.
time lag — a delay between an action and its effect. a time lag affects monetary policy transmission.
unintended consequence — an effect that was outside the original aim. identify an unintended consequence of a price ceiling.
welfare loss — a reduction in total economic benefit relative to a benchmark. shade the welfare loss in the diagram.
common-access resource — a resource from which exclusion is difficult and use can reduce availability to others. overuse of a common-access resource.
carbon tax — a tax based on carbon emissions or carbon content. a carbon tax changes the cost of emissions.
supply-side policy — a policy aimed at improving productive capacity or efficiency. evaluate a supply-side policy over a longer horizon.
tariff — a tax on imports in the usual trade-policy context. a tariff can raise the domestic price of an imported good.
quota — a limit on the quantity of a good allowed or produced. an import quota restricts quantity.
comparative advantage — the ability to produce at lower opportunity cost. specialise according to comparative advantage.
terms of trade — the ratio of export prices to import prices, usually expressed as an index. a rise in export prices can improve the terms of trade.
inequality — an uneven distribution of income, wealth or opportunity. distinguish income inequality from poverty.
redistribution — a change in how income or resources are shared. taxes and transfers can support redistribution.
absolute poverty — a lack of resources to meet a specified minimum standard. economic growth may reduce absolute poverty.
relative poverty — a low standard of resources measured against prevailing levels in a society. relative poverty can persist as incomes rise.

21–40 Microeconomic analysis

scarcity — limited resources in relation to wants. scarcity requires a choice.
opportunity cost — the value of the best alternative forgone. evaluate the opportunity cost of a subsidy.
elasticity — responsiveness of one variable to a change in another. price elasticity affects the fall in quantity demanded.
inelastic — relatively unresponsive to a change in a specified variable. inelastic demand for a necessary input.
equilibrium — a position where opposing forces balance in the model. a new market equilibrium.
surplus — an excess or a gain beyond a reference point, depending on context. a fall in consumer surplus.
shortage — an excess of quantity demanded over quantity supplied at a given price. a binding ceiling can create a shortage.
marginal — relating to the next unit or a small additional change. compare marginal social cost with marginal social benefit.
externality — a cost or benefit affecting a third party outside the transaction. congestion can create a negative externality.
incidence — the distribution of an economic burden or benefit. the incidence of a tax depends on relative elasticities.
subsidy — financial assistance that can change incentives or costs. a subsidy reduces the effective cost of an activity.
rationing — allocating a limited quantity among competing users. price rationing allocates available supply.
monopoly — a market with a single seller, or dominant market power in relevant usage. evaluate the consequences of monopoly power.
monopsony — a market with a single buyer, or dominant buyer power in relevant usage. a firm with monopsony power can influence wages.
oligopoly — a market dominated by a few firms. strategic interaction in an oligopoly.
contestability — the extent to which entry and exit can discipline firms. contestability depends partly on sunk costs.
barrier — an obstacle that makes entry or action difficult. a barrier to entry protects incumbents.
welfare — economic wellbeing, often assessed through benefits and costs. evaluate the net welfare effect.
allocative efficiency — allocation where marginal social benefit equals marginal social cost in the standard framework. the tax may move output toward allocative efficiency.
productive efficiency — production at the lowest attainable average cost for the relevant output or at minimum average cost in the standard firm diagram. distinguish productive efficiency from higher output alone.

41–60 Macroeconomic analysis

inflation — a sustained rise in the general price level. distinguish inflation from an individual price rise.
disinflation — a fall in the inflation rate while prices may still be rising. disinflation reduces the rate of price increase.
deflation — a sustained fall in the general price level. deflation can increase the real burden of debt.
unemployment — the condition of being without work while available for and seeking it under the standard measure. cyclical unemployment can rise during a downturn.
productivity — output per unit of input. higher labour productivity can reduce unit costs.
aggregate demand — planned total expenditure on domestically produced output at a given price level. higher investment can raise aggregate demand.
aggregate supply — total output firms are willing to produce at a given price level. higher input costs can reduce short-run aggregate supply.
output gap — the difference between actual and potential output. a negative output gap indicates spare capacity.
multiplier — the ratio of the eventual change in national income to the initial change in an injection. a larger marginal propensity to import can reduce the multiplier.
leakage — a withdrawal from the circular flow, such as saving, taxation or imports. higher imports increase a leakage.
injection — spending entering the circular flow through investment, government spending or exports. a rise in exports is an injection.
fiscal policy — use of government spending and taxation to influence the economy. an expansionary fiscal policy can raise demand.
monetary policy — central-bank action influencing monetary and financial conditions. monetary policy operates through several channels.
transmission — the process through which a policy change affects the economy. the transmission from rates to investment can take time.
exchange rate — the price of one currency in terms of another. the exchange rate can affect import prices.
depreciation — a fall in the value of a currency under a floating exchange-rate system. depreciation can raise the domestic price of imports.
current account — the balance-of-payments account recording trade and primary and secondary income flows. consider the effect on the current account.
crowding out — a reduction in private spending associated with increased public spending or borrowing. crowding out may limit the rise in investment.
capacity — the level of output an economy or producer can sustain with available resources. spare capacity can affect the inflation response.
hysteresis — a lasting effect of a temporary shock on the economy. long unemployment spells can contribute to hysteresis.

61–80 Taking a position

claim — a statement you want the reader to accept. make a claim.
stance — your position on a question. take a clear stance.
thesis — the central position or interpretation your response develops. support the thesis.
premise — an idea the argument starts from. question the premise.
assumption — something treated as true without being established. test the assumption.
assert — state a position firmly. assert that access matters.
argue — give reasons in support of a position. argue for a trial.
maintain — continue to hold or defend a view. maintain that the policy is fair.
contend — put forward a position that can be challenged. contend that the proposal is workable.
justify — give sufficient reasons for a decision or judgement. justify the expense.
advocate — publicly support an action or change. advocate for reform.
defend — answer criticism of a view or choice. defend a decision.
qualify — limit a statement so it applies only where warranted. qualify the conclusion.
concede — acknowledge a valid point made by the other side. concede that costs may rise.
rebut — answer an opposing claim with reasoning or evidence. rebut the objection.
counterargument — a reasoned objection to a position. address a counterargument.
reservation — a concern that makes agreement incomplete. express a reservation.
distinguish — show what makes two things different. distinguish cost from value.
criteria — standards used to judge something. agree on the criteria.
verdict — a final judgement reached after consideration. reach a verdict.

81–100 Using evidence and reasoning

evidence — information that helps establish a claim. draw on evidence.
example — a specific case that makes a general point clearer. give a concrete example.
illustrate — make an idea clearer through a case or detail. illustrate the difficulty.
demonstrate — show how or why something is true. demonstrate a connection.
substantiate — support a claim with convincing information. substantiate the allegation.
corroborate — provide independent support for an existing account. corroborate the witness’s account.
infer — draw a conclusion from available clues. infer a motive from the wording.
imply — suggest a meaning without saying it directly. imply that change is possible.
interpret — explain what something means in context. interpret a figure in context.
analyse — examine how parts work together. analyse the writer’s choices.
evaluate — judge the strength, quality or value of something. evaluate the proposal.
plausible — reasonable enough to believe given what is known. a plausible explanation.
credible — worthy of belief or trust. a credible source.
relevant — directly connected to the issue being considered. relevant to the question.
sufficient — enough for the purpose or conclusion at hand. sufficient for a limited trial.
representative — typical enough to reflect a larger group. a representative sample.
anecdote — a brief account of a particular incident. open with an anecdote.
limitation — something that restricts what a method or claim can establish. acknowledge a limitation.
contradict — state or show something incompatible with another claim. contradict the earlier finding.
synthesise — combine ideas from separate sources into a new account. synthesise competing accounts.

101–120 Connecting ideas

whereas — introduces a clause that contrasts with another. whereas the first option costs less.
although — introduces a fact that qualifies the main statement. although demand may rise.
however — signals a contrast or change in direction. however, costs remain uncertain.
nevertheless — signals that a point still holds despite a difficulty. nevertheless, the trial could go ahead.
conversely — introduces a contrasting relationship in the reverse direction. conversely, lower demand can free capacity.
similarly — points out a meaningful likeness. similarly, smaller groups need space.
likewise — shows that a similar point applies elsewhere. likewise, evening users need lighting.
consequently — introduces a result of what came before. consequently, the queue grew.
therefore — introduces a conclusion or result that follows. therefore, a trial is justified.
furthermore — adds a supporting point. furthermore, the existing room is free.
specifically — narrows the discussion to a precise detail. specifically, the plan would add two sessions.
instead — signals a replacement or different choice. instead, use the current building.
alternatively — introduces another option. alternatively, change the timetable.
otherwise — indicates what happens under different conditions. book early, otherwise places may fill.
provided — introduces a condition when used with a following clause. provided that staffing is adequate.
despite — introduces something that fails to prevent the main outcome. despite the delay.
unlike — marks a difference between two things. unlike the previous scheme.
respectively — matches items with values in the same stated order. costs were $5 and $8, respectively.
overall — signals a judgement about the whole picture. overall, the benefits are modest.
ultimately — identifies what matters after other factors are considered. ultimately, the decision depends on demand.

121–140 Explaining cause and effect

cause — produce or bring about an outcome. cause avoidable delays.
contribute — play a part in bringing about an outcome. contribute to overcrowding.
trigger — set a process or reaction in motion. trigger a review.
accelerate — make a process happen faster. accelerate the transition.
intensify — make something stronger or more severe. intensify competition.
exacerbate — make an existing problem worse. exacerbate existing inequalities.
mitigate — reduce the severity or harmful effect of something. mitigate the harm.
prevent — stop something from happening. prevent further damage.
deter — discourage someone from taking an action. deter people from taking risks.
enable — make an action possible. enable students to attend.
facilitate — make an action or process easier. facilitate access to training.
reinforce — strengthen an effect, belief or behaviour. reinforce an existing pattern.
undermine — weaken something, often gradually. undermine public trust.
sustain — keep something going over time. sustain the improvement.
displace — push something or someone out of an existing place or role. displace smaller operators.
redistribute — change how something is shared. redistribute public funds.
consequence — an outcome that follows an action or event. an unintended consequence.
mechanism — the process through which an effect occurs. identify the mechanism.
correlation — a pattern in which two things vary together. observe a correlation.
constraint — a condition that limits what can be done. work within a budget constraint.

141–160 Comparing options and weighing costs

benefit — a useful or favourable effect. a long-term benefit.
drawback — a feature that makes an option less attractive. a potential drawback.
trade-off — a compromise in which gaining one thing costs another. a trade-off between cost and convenience.
priority — something that deserves attention before competing needs. give priority to public health.
alternative — another way of achieving a goal. offer an alternative to driving.
feasible — possible to carry out with the available resources. a feasible timetable.
viable — capable of working successfully over time. a viable business model.
practical — suited to what can actually be done. a practical solution.
effective — able to produce the intended result. an effective response to congestion.
efficient — able to achieve a result with relatively little waste. efficient use of limited funds.
affordable — within the means of the people expected to pay. affordable childcare.
accessible — easy or possible for the intended users to reach or use. accessible public transport.
equitable — fair in light of differing needs and barriers. equitable access to training.
proportionate — appropriate in scale to the problem. a proportionate penalty.
substantial — large enough to matter. a substantial reduction in waste.
measure — an action taken to address a problem. introduce a temporary measure.
outweigh — be more important than something on the other side. the benefits outweigh the costs.
offset — counterbalance part or all of an effect. offset part of the expense.
allocate — assign money, time or resources to a purpose. allocate funds to local schools.
compromise — an arrangement that meets competing needs only in part. reach a workable compromise.

161–180 Public decisions and evidence

governance — how institutions make and carry out decisions. local governance shapes enforcement.
jurisdiction — the area or matters over which an authority has legal power. within the regulator’s jurisdiction.
funding — money made available for a purpose. secure funding for a trial.
regressive — placing a larger proportional burden on people with less income in a tax or charging context. a potentially regressive flat charge.
progressive — placing a larger proportional tax burden on higher incomes. a progressive tax schedule.
procurement — the process of buying goods or services, often for an institution. public procurement rules.
demand — the amount of interest or need for something. meet growing demand.
outcome — the result of an action or process. improve learning outcomes.
levy — an officially imposed charge. a levy on disposable packaging.
exemption — release from a rule or charge. an exemption for emergency vehicles.
substitution — the use of one option in place of another. substitution of rail travel for driving.
displacement — movement of a problem, activity or group elsewhere. displacement of traffic into nearby streets.
rationale — the reasoning behind an action. explain the rationale for a fee.
baseline — a starting measurement for later comparison. collect baseline data before the trial.
causality — the relationship through which one factor produces an effect. a claim about causality needs evidence.
implementation — the process of putting a plan into practice. the implementation depends on local staffing.
legitimacy — acceptance that an institution or action has rightful standing. public scrutiny can strengthen legitimacy.
distributional — relating to how effects are shared across groups. the distributional impact of a transport charge.
supply — the amount of something available for use. increase the supply of rental homes.
spillover — an effect that reaches beyond the original activity or area. a spillover into neighbouring districts.

181–200 Describing scale and change

widespread — present across many places or groups. widespread smartphone use.
prevalent — common in a particular group or setting. prevalent among younger adults.
persistent — continuing over a period despite efforts or change. a persistent shortage.
gradual — happening in small steps over time. a gradual decline.
incremental — proceeding through successive small additions or changes. incremental improvements.
temporary — lasting for a limited period. a temporary measure.
permanent — intended or expected to continue indefinitely. a permanent change.
systemic — rooted in the workings of a whole system. a systemic failure.
structural — arising from the organisation of institutions or systems. structural barriers to employment.
localised — limited to a particular area or group. a localised shortage.
uneven — distributed or developing differently across a group. uneven growth across regions.
disproportionate — too large or too small relative to a comparison. a disproportionate burden.
unintended — occurring without being planned. an unintended effect.
preventable — capable of being stopped before it happens. preventable injuries.
measurable — able to be assessed in observable terms. a measurable improvement.
threshold — a point at which a rule, effect or condition begins to apply. reach a minimum threshold.
trajectory — the direction in which change is moving over time. alter the long-term trajectory.
fluctuate — rise and fall irregularly. prices fluctuate over time.
stabilise — become or make something more steady. stabilise demand.
reverse — change an earlier direction or outcome. reverse the decline.

What Paper 1 asks you to demonstrate

The IB examiner guidance describes one extended-response question from three. In Part (a), explain the economic theory and use relevant terms and diagrams where appropriate. In Part (b), develop analysis, use real-world examples and evaluate the issue in the question. A named example needs enough detail to show how it illustrates or tests the theory.

Paper 1 is separate from the other Economics assessments. SL and HL share the Paper 1 structure. Check the syllabus content for your level. A policy example can help with more than one key concept, but the part you discuss should depend on the question.

IB Economics course and key concepts · IB Economics SL subject brief · IB Economics HL subject brief · IB Economics examiner instructions · Transport for London on the introduction of congestion charging

Word list · Worked response

Worked Part (a) move on external costs

Original practice task. Explain how congestion can lead to market failure. A driver considers costs such as fuel, time and any charge paid directly. The trip can impose additional delay on other road users. If that external cost is missing from the driver’s decision, marginal social cost exceeds marginal private cost over the relevant output range.

In the standard model, identify the market outcome and the socially efficient quantity. Label the axes and curves, then explain the difference in quantities. The diagram helps show why the privately chosen level of use can exceed the socially efficient level. Use a relevant model and state its assumptions instead of drawing several unrelated curves.

Word list · Exam requirements · Worked analysis

Worked Part (b) move using London

Transport for London introduced congestion charging in central London in February 2003. Its stated objective was to manage traffic and congestion by charging vehicles entering the zone during busy periods. That detail gives an example of a policy intended to bring part of the wider congestion cost into the decision to drive.

A defensible evaluation distinguishes the charging mechanism from evidence of its result. Some travellers may change mode or travel time when charged. Others may pay if they have few substitutes. An assessment of effects would need to consider traffic inside and outside the zone, alternative services and which travellers bear the charge. An official statement of the objective can establish the policy’s purpose. It cannot establish every outcome by itself.

Connect the example to a key concept only if it advances the argument. Efficiency concerns the allocation of road use and the cost imposed on others. Equity asks who can adjust and who bears the burden. The two criteria may support different parts of your final judgement.

Word list · Worked response · Fencing Method

How to fence an IB Economics word

1. Base. The charge affects incentives. 2. Detail. The charge raises the private cost of driving into a busy zone. 3. Tone. The charge may encourage some drivers to use another route, mode or time. 4. Logic. Where substitutes are available, switching may reduce the delay that additional trips impose on others. 5. Transfer. An emissions charge can change firms’ choices if a less polluting method is available.

Now fence equity. Identify two groups affected by the policy and name the difference between their options. Explain why one may bear a larger burden. Then decide whether that difference changes the recommendation or calls for a safeguard.

The eduKate Fencing Method for Vocabulary

Word list · Worked analysis · Practice and FAQs

Practice and frequently asked questions

How many questions should I choose? One, with both parts answered. How many marks does each part carry? Ten and fifteen. Do real-world examples need statistics? Use accurate details that connect to the model or judgement. A number helps only if you know what it measures and why it matters.

Try writing a Part (a) explanation of a subsidy and a Part (b) evaluation of its effects. Select an actual policy you have studied. Identify its target, one plausible mechanism and an outcome or limitation you can verify. Keep the two answers focused on the different jobs set by the question.

Word list · Fencing Method

Practice workshop

Keep the two Paper 1 parts distinct

After reading the question, write the job of Part (a) and Part (b) in separate notes. The first may ask you to explain a mechanism. The second may ask you to evaluate a policy using examples. A diagram can be relevant to both, but the written argument must develop the reasoning demanded by each part.

Turn a policy name into usable evidence

Record the place, policy, target and relevant outcome or uncertainty. In the London example, identify the zone and the objective of reducing congestion. If you want to discuss an outcome, consult evidence that measured it. Avoid treating an official statement of intention as proof that the objective was achieved.

Use a real-world example at the right scale

A measure in one city can illustrate what a charge does. It does not automatically establish how all cities respond. Name a condition that affects transfer, such as the availability of public transport. This gives the example a role in evaluation and helps you avoid an unsupported general conclusion.

Link a diagram to a stakeholder

After drawing a model, name who pays the price, receives the benefit or changes behaviour. If a charge reduces use in a zone, other road users may gain from shorter delays while some drivers face higher costs. Explain the mechanism in words and distinguish the outcome from a change in government revenue.

Evaluate an unintended consequence

A driver may avoid a charge by travelling outside the zone. Explain whether that could reduce congestion overall or shift it to a different location. Choose a measure that would help decide, such as changes in traffic on adjacent roads. The example should test the policy’s objective, not just add a possible drawback.

Connect efficiency and equity carefully

An intervention might improve resource allocation while burdening a group with few alternatives. Write one sentence evaluating efficiency and another evaluating fairness. Then decide how to weigh them. A judgement can support the policy with a safeguard when the two objectives point in different directions.

Try a macroeconomic transfer

Use a real policy example from your course to explain an increase in aggregate demand. Identify the spending change and the outcome you are evaluating. Then explain whether spare capacity, import leakages or timing could affect the result. Match the example and model to the specific period you discuss.

Review the conclusion against the example

Circle your real-world example and underline the sentence that explains what it demonstrates. Then mark the limitation that affects the judgement. If the same conclusion would follow without any of those details, make the example more relevant or use it to test the strength of the theory.

Prepare a compact evidence notebook

For each policy in your notes, give it one main use and one limit. A transport measure might illustrate intervention in a market with external costs but offer weaker evidence on distribution unless you have data about who pays. This habit helps you select examples under pressure instead of forcing a familiar case into an unsuitable question.

Distinguish a conditional judgement from indecision

Write two clear conditions under which a policy would have different effects. Then decide which condition seems more relevant in the case you studied. A conditional answer is useful when it takes a position under named circumstances. Merely saying that everything depends on context leaves the reader without a judgement.

Check the timing and weighting for your level

The official subject briefs give Paper 1 the same 1 hour 15 minute duration at both levels. It accounts for 30% of the SL grade and 20% of the HL grade. After a mock, record how much time you used for each part and whether you had time to revise the judgement.

Next reading

Cambridge International AS & A Level Economics (9708) · AP U.S. Government and Politics · AQA A Level Politics (7152)

AQA A Level Economics 7136 · Cambridge A Level Thinking Skills 9694 · Back to the 200-word list

Top 200 Vocabulary Word List for IB Diploma Programme Economics Paper 1 (SL and HL) | Essay Writing