Why Can’t You Have Unlimited Pizza? And Other Economic Truths You’ll Learn in IB

Why Can’t You Have Unlimited Pizza? And Other Economic Truths You’ll Learn in IB

Welcome to IB Economics. Or as I like to call it: the course where you realise your dreams are expensive, your time is limited, and nothing is truly free (except maybe air… and even that’s debatable).

So let’s get you started with the stuff every economist has to grapple with before they can start throwing diagrams at people.

Scarcity: Why the World Doesn’t Work Like an All-You-Can-Eat Buffet

Imagine you’ve got £10, three hours, and a gnawing hunger for pizza and bubble tea and cinema popcorn. Bad news: you can’t have all three. That’s scarcity. Resources are limited - money, time, oil, teachers, even clean air. But your wants are infinite (you greedy little rational economic agent, you).

This is the core of Economics: how to make choices in a world where you can’t have everything.

Opportunity Cost: The Real Price of That Netflix Binge

Every time you choose something, you’re giving something else up. That’s opportunity cost. Watch four episodes of The Office instead of trying to understand for the tenth time the guidelines to your Econ IA? The opportunity cost is a possible grade drop - and maybe a lifetime of “Do you want fries with that?” (Too harsh? Maybe. But welcome to Economics.)

Milton Friedman once said, “There’s no such thing as a free lunch.” He was right. Someone always pays.

Economics = Social Science?

Yep. Economics isn’t just about numbers and graphs - it’s about people, their decisions, and how those decisions shape the world. That’s what makes it a social science. You’ll study how individuals, firms, governments, and entire countries behave in markets.

And because people are messy, emotional, and weird (you’ve seen TikTok, you've certainly spent time in Instagram), economics gets interesting really fast.

Micro, Macro, and Global Economics: Pick Your Level of Chaos

• Microeconomics is the small stuff: how firms and consumers interact, why your local coffee shop raises prices after school, or why Apple gets away with charging £1,400 for a phone.

• Macroeconomics is the big picture: inflation, unemployment, government policy, and whether the economy is growing or crashing.

• The global economy? That’s where it all collides - international trade, migration, inequality, and “Why does a war in Ukraine make your bread more expensive?”

Real-World Issues: Your Syllabus Actually Means Something

IB Econ focuses on six Real World Issues (RWIs). These aren’t just theory - they’re everywhere:

1. Why do people and firms make the choices they do?

2. What happens when markets fail?

3. Why do economies go boom-and-bust?

4. Can governments fix things? Or make them worse?

5. Who wins and loses when the world goes global?

6. Why is development still so uneven?

These questions are your compass. Everything you will learn through your course will relate back to one (or more) of them.

The 9 Central Concepts (a.k.a. Your Best Friends for Exams, for your IA and for your EE)

IB loves a good concept. Here’s the cheat code: remember “WISE CHOICES”
Each letter stands for one of these nine ideas:

• (W)ell-being - not just GDP, but quality of life

• (I)nterdependence - we rely on each other and global systems

• (S)carcity - because resources are limited

• (E)fficiency - doing more with less

• (C)hoice - the foundation of all economic activity

• (H)change - economies never stand still

• (O)pportunity cost - trade-offs are everywhere

• (I)ntervention - governments stepping in

• (E)quity - fairness (not the same as equality)

• (S)ustainability - the future matters too

(Okay, that was ten letters. IB’s never been great at acronyms.)

Factors of Production: What It Takes to Make Stuff

You’ll hear this again and again: everything we produce needs four basic ingredients:

• Land (natural resources like oil, wood, water)

• Labour (workers, baristas, coders, teachers)

• Capital (tools, machines, factories, and even your laptop)

• Enterprise (the person who combines it all and takes the risk—hello, Elon Musk)

Each one earns an income:

• Land → rent

• Labour → wages

• Capital → interest

• Enterprise → profit

Needs vs Wants: You Can’t Always Get What You Want

• Needs = food, water, shelter, WiFi (okay, maybe not that last one)

• Wants = everything else. You’ll be surprised how fast wants become “needs” when the new iPhone drops.

Economic Systems: Who’s Running This Show?

Every country has to decide how it answers the big 3 questions:

• What to produce?

• How to produce it?

• For whom?

And that’s where systems come in:

• Free Market = private firms rule. Think USA.

• Planned economic system = government controls most decisions. Think North Korea.

• Mixed = a bit of both. Think… pretty much every other country.

Private vs Public Sector

• Private sector = firms and businesses driven by profit

• Public sector = government services like schools and hospitals

Both are essential. Even your school probably uses a bit of both.

Final Thought: Economics Is About You

Whether you’re choosing lunch or a career, whether you're voting in an election or shopping online - you are constantly making economic choices.

This course is about learning to understand those choices, ask the right questions, and maybe… find some answers.

Coming Up Next: The Production Possibility Curve (PPC)

Because nothing says “welcome to Economics” better than a nice clean graph about trade-offs.