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IB Economics Paper 1 Past Papers & Drilling: 25-Mark Essays with Answers
TUTORZONE ORIGINAL DRILLING MOCK · IB ECONOMICS PAPER 1 (EXTENDED RESPONSE)
Written to the IB Economics guide (first assessment 2022): Paper 1 is an extended response paper worth 25 marks in 1 h 15 min, one question from a choice of three, part (a) 10 marks and part (b) 15 marks, 30% of SL and 20% of HL; Paper 2 data response carries 40 marks (40% SL, 30% HL), Paper 3 is the HL policy paper at 60 marks (30% HL), and the internal assessment completes the grade. This is a Paper 1 drilling mock: 3 questions of 25 marks across micro market failure, macro demand management and the global economy, with answers and techniques.
What is in IB Economics Paper 1, and what is it worth?
Direct answer: Paper 1 is an extended response worth 25 marks in 1 h 15 min, one question from a choice of three, with part (a) at 10 marks and part (b) at 15; it is 30% of SL and 20% of HL. Paper 2 is a 40-mark data response (40% SL, 30% HL), Paper 3 is the HL-only 60-mark policy paper (30%), and the IA carries 45 marks (30% SL, 20% HL).
Assessment at a glance (2027)
| Component | Content | Weighting | Duration |
|---|---|---|---|
| Paper 1 (SL and HL extended response) | one of three, (a) 10 + (b) 15 | SL 30% / HL 20% | 1 h 15 min |
| Paper 2 (SL and HL data response) | 40 marks, parts (a)-(g) | SL 40% / HL 30% | 1 h 45 min |
| Paper 3 (HL only policy paper) | 60 marks, two compulsory questions of 30 | HL 30% | 1 h 45 min |
| Internal assessment (IA) | three commentaries, 800 words each, 45 marks | SL 30% / HL 20% | 20 teaching hours |
IB Economics drilling technique: a Paper 1 essay needs four layers – definition, diagram, explanation and evaluation – and part (b) must carry a real-world example to support the judgement. In calculations (multiplier, elasticity, deadweight loss) write the formula first, then substitute, and state the units.
How this paper was built
This is a TutorZone original drilling mock: the questions follow the IB Economics Paper 1 shape (extended response, 25 marks, 1 h 15 min, one from a choice of three, part (a) 10 marks and part (b) 15 marks) and the answers are our own, not IB past papers or mark schemes.
Numerical answers (multiplier 4, AD +$32bn, deadweight loss $150, export revenue +2.6% after the depreciation) were recomputed programmatically.
Pacing
| Section | Marks | Suggested time | What to do first |
|---|---|---|---|
| Paper 1 (SL and HL extended response) | SL 30% / HL 20% | 10 min plan, 20 min (a), 40 min (b) | definition, diagram, evaluation, real example |
| Paper 2 (SL and HL data response) | SL 40% / HL 30% | time by marks, formula first in calculations | read the data, quote it, quantify |
| Paper 3 (HL only policy paper) | HL 30% | 50 min a question, 5 min to check | policy advice with data and limits |
| Internal assessment (IA) | SL 30% / HL 20% | one unit and one key concept per commentary | real article, diagram, evaluation |
How should part (a) 10 marks and part (b) 15 marks be written?
Direct answer: part (a) is definition, diagram and mechanism, answering why; part (b) adds a second perspective, a real-world example and an explicit judgement, answering whether something is most effective. Both parts need a diagram with the shift marked.
Paper 1: extended response drilling (answer 1 of 3, 25 marks each)
In the exam you answer one of three; when drilling, work all three and only pick one against the clock.
Question 1 (25 marks)
(Micro: market failure) A paper mill faces a marginal private cost (MPC) of $40 a tonne. Its effluent costs a downstream fish farm $15 a tonne, so the marginal social cost (MSC) is $55. The free market produces 80 tonnes, while output at which marginal social benefit equals marginal social cost is 60 tonnes.
(a) Explain how a negative externality of production causes market failure. (10 marks)
(b) Discuss whether a carbon tax is the most effective policy for correcting this kind of market failure. (15 marks)
Question 2 (25 marks)
(Macro: demand management) An economy has a marginal propensity to consume (MPC) of 0.75 and the government raises spending by $8bn.
(a) Explain how the increase in government spending affects aggregate demand and the price level. (10 marks)
(b) Discuss whether fiscal policy or monetary policy is more effective in closing a deflationary gap. (15 marks)
Question 3 (25 marks)
(Global economy: exchange rates and the balance of payments) A country’s currency depreciates by 10% and the price elasticity of demand for its exports is 1.4.
(a) Explain how the depreciation affects the country’s current account. (10 marks)
(b) Discuss whether depreciation is the best way to correct a persistent current account deficit. (15 marks)
Paper 1 offers three questions – should I drill all three?
Direct answer: work all three when practising (they cover micro, macro and the global economy); against the clock answer one, and practise choosing within five minutes – take the question where you can draw the diagram and supply a real example.
Paper 1 answers and mark points
Question 1
(a) The externality makes MSC > MPC: the firm decides on private cost alone and output settles at 80 tonnes, while the socially optimal output is 60 tonnes, so there is overproduction of 20 tonnes. With a marginal external cost of $15 a tonne the deadweight loss is 1/2 x 20 x 15 = $150; the price does not reflect the true social cost and resources are misallocated. (10)
(b) A tax of $15 a tonne raises MPC to MSC and internalises the external cost, which targets output directly and earns the higher band. If paper demand is inelastic, however, output falls little; part of the tax is passed to consumers and is regressive; and production may relocate to an untaxed jurisdiction. Tradable permits give certainty over the quantity of pollution but the initial allocation is contested, while direct regulation is cost-inefficient. A carbon tax is therefore an effective instrument, but whether it is the most effective depends on elasticity, how the revenue is used and cross-border coordination. (15)
Question 2
(a) Government spending is a component of aggregate demand, so AD rises directly and then through the multiplier: multiplier = 1 / (1 – 0.75) = 4, so AD rises by 8 x 4 = $32bn. The AD curve shifts right; while spare capacity remains this mainly raises real output, and near full employment it mainly raises the price level. (10)
(b) Fiscal policy can inject spending through infrastructure and transfers with a clear direction, but legislation and implementation lag and the deficit widens. Monetary policy decides faster, yet when the policy rate is near zero and confidence is weak, cuts may not revive borrowing and investment (a liquidity trap), and transmission takes time. Fiscal policy is more reliable for a large persistent gap; monetary policy is more flexible for a short shock. The judgement must rest on the size of the gap, the level of interest rates and the policy lags. (15)
Question 3
(a) The depreciation cuts the foreign-currency price of exports by 10% and quantity rises by 14% given an elasticity of 1.4, so export revenue changes by (1 – 0.10) x (1 + 0.14) – 1 = +2.6%. Provided the sum of the export and import demand elasticities exceeds 1 in absolute value (the Marshall-Lerner condition), a depreciation improves the current account; imports become dearer in domestic currency and their volume also falls. (10)
(b) The effect takes time, and with low short-run elasticities the current account may worsen first (the J-curve). A depreciation raises the domestic price of imported inputs, so imported inflation follows; if trading partners devalue in response the competitive gain cancels out; and relying on depreciation weakens the incentive to raise productivity. Supply-side policies and expenditure-reducing measures address a structural deficit but act slowly and cost jobs. Depreciation suits an economy with sufficient elasticities and low inflation; whether it is best depends on the cause of the deficit and on partner retaliation. (15)
How should the 75 minutes of Paper 1 be split?
Direct answer: 10 minutes planning (choose, diagram, bullet points), 20 minutes for part (a), 40 minutes for part (b) and 5 minutes checking the diagram and units. If part (b) is unfinished at 40 minutes, go straight to the conclusion.
Where these marks are usually lost
| Mistake | What it looks like | What it costs | Instead |
|---|---|---|---|
| Definitions without a diagram | A text-only essay with no supply-and-demand or AD/AS diagram | Part (a) rarely passes half marks | At least one diagram per essay with the shift marked |
| No real-world example in (b) | Abstract theory only, no country or industry | The evaluation band is capped | One real example per part (b) |
| Wrong multiplier or elasticity formula | Written as 1/MPC or %dP / %dQ | The calculation and the explanation after it both fail | Multiplier = 1 / (1 – MPC); PED = %dQ / %dP |
How to use this paper
First drill: the full 1 h 15 min on a single question, spending 10 minutes planning and drawing the diagram.
Mark it: check the diagram, the formula and the layers of evaluation in part (b).
Second drill: three to seven days later, take the other two questions and aim to finish inside 1 h 5 min.
What should I do after drilling this Paper 1 mock?
Direct answer: log the questions where the diagram, the example or the formula failed; redo the other two questions three to seven days later; then move to Paper 2 and drill quoting the data and quantifying it.
FAQ
Is this an IB past paper?
No. The questions and answers are TutorZone originals, not IB past papers or mark schemes.
Does the SL Paper 1 differ from the HL paper?
The structure is the same (1 h 15 min, 25 marks, one of three), but the SL paper examines SL content only and is worth 30%, while the HL paper includes the HL extension and is worth 20%.
How are the multiplier and the deadweight loss calculated?
Multiplier = 1 / (1 – MPC), which is 4 at MPC 0.75; deadweight loss = 1/2 x excess output x marginal external cost, which is $150 here.
Official references
| Resource | What to check |
|---|---|
| IB Economics subject page (first assessment 2022) | Confirm the marks, times and weightings of Papers 1-3 and the IA |
| https://www.tutorzone.com.hk/en-alevel-economics-9708-paper-2-mock-2027/ | A-Level Economics 9708 Paper 2 drilling mock |
Related: practice area · A-Level Economics 9708 drill guide · IB Economics data response drilling mock
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