Welcome to the final definitive EconPrep Guide for IB Economics’ Assessments! This is a complete, ultimate guide to all IB Economics Examination formats, written to help you excel in your IB Economics Paper 3 exam.
Check out our Ultimate Guides for Paper 1 and Paper 2.
This guide is targeted at HL Economics student, since it focuses solely on Paper 3.
In this guide, we’ll cover:
- Introduction to Paper 3
- Paper 3 Marking Scheme and Rubric
- EconPrep’s Paper 3 Framework for ‘Recommend a Policy’ questions.
You can also download the full guide as a 24-page PDF 👇🏻
With that, let’s dive in!
Introduction to Paper 3
Paper 3 is a 1 hour and 45 minutes policy paper worth 60 marks for HL-only students.
You are given 2 compulsory questions to answer. Each question is subdivided into 2 parts, (a) and (b).
Questions include a mix of qualitative (written) and quantitative (numerical) formats.
You are allowed to use a calculator and GDCs, but you cannot use a formula sheet/booklet.
Paper 3 is worth 30% of the HL IB Economics grade.
Assessment Objective (AO): Why do Paper 3?
Why do Paper 3? What skills or knowledge is the IB examining in Paper 3? To understand this, we first unpack how the IB conducts its assessments.
IB Assessment Objectives
As an overview, the IB examines 3 key skillsets in students:
- Knowledge: Do you know and understand the Economic concepts?
- Application/Analysis: Can you apply these Economic concepts either to the given question, or to real-world issues, in the form of in-depth analysis?
- Evaluation: Can you evaluate different perspectives, and synthesise your own thoughts?
These 3 skillsets are detailed as 4 assessment objectives in the IB Guide: AO1, AO2, AO3 and AO4.
- Knowledge and Understanding (AO1)
- Demonstrate knowledge and understanding of specified content
- Demonstrate knowledge and understanding of the common SL/HL syllabus
- Demonstrate knowledge and understanding of current economic issues and data
- HL: Demonstrate knowledge and understanding of the extension topics
- Application and analysis (AO2)
- Apply economic concepts and theories to real-world situations
- Identify and interpret economic data
- Analyse how economic information is used effectively in particular contexts
- In the internal assessment task: explain the link between key economic concepts and economic commentaries
- HL: Demonstrate application and analysis of the extension topics
- Synthesis and evaluation (AO3)
- Examine economic concepts and theories
- Use economic concepts and examples to construct and present an argument
- Discuss and evaluate economic information and theories
- HL: Demonstrate economic synthesis and evaluation of the extension topics
- HL: Select and use economic data using economic theory to make policy recommendations.
- Use and application of appropriate skills (AO4)
- Produce well-structured written material, using appropriate economic theory, concepts and terminology
- Produce and use diagrams to help explain economic theory, concepts and real-world issues
- Select, interpret and analyse appropriate extracts from the news media
- Interpret appropriate data sets
- Use quantitative techniques to identify, explain and analyse economic relationships
EconPrep In Context: Paper 3
How do you translate these in the context of Paper 3?
According to the IB Guide, Paper 3 parts (a) and (b) assess all these objectives.
This is vague, perhaps intentionally. It doesn’t help you score.
Here’s how EconPrep interprets the objectives, in the context of Paper 3:
| Assessment Objective (AO) | What IB Economics Examiners are Asking: |
| AO1: Knowledge and Understanding | Does this student’s essay content show they understand the content/concept specific to the demands of the question?How thorough is this understanding?How simply and logically are they able to show their understanding in their written essay? |
| AO2: Application and analysis | How adequately can the student apply economic concepts and theories to real-world situations, whether real or hypothetical?Is the student able to identify nuances and/or context-specific points in their written response? Or are they simply regurgitating news and textbook content? |
| AO3: Synthesis and evaluation | How thoroughly is the student able to examine economic concepts and theories?How well is the student able to uncover assumptions and trade-offs in the policy decisions?How accurately did the student use context to influence their recommended policies? |
| AO4: Use and application of appropriate skills | How clear and logical are the student’s key points?How effectively can the student construct and convey your points on paper, within a limited time?How effectively is the student able to differentiate between academic theory in textbooks, and the question’s context? |
And the best part? The rubrics validate our hypothesis.
The next section covers the rubric in detail. Skip here to view how we at EconPrep digest the Paper 3 rubric.
Rubric: Paper 3 Marking Scheme (HL/SL)
IB Guide Rubric
Actual Exam Rubric
(Source: November 2022 HL Economics Paper 3)
Interpreting IB Guide vs. Actual Exam Rubric
The examples above show how IB Guide rubrics are different from rubrics in the Paper 3 exam.
The IB Guide publishes a table of markbands (range of marks with descriptors). In the actual Paper 3 exam, this markband table is supplemented with a suggested markscheme. The markscheme informs examiners specific points to look out for in a student’s response.
In short, the markscheme outlines what content you should write, while the markband table outlines how you should convey this content.
The IB Guide outlines that “Marks are allocated using a combination of an analytic markscheme and markbands.” Hence, to maximise your Paper 3 score, you must achieve 2 tasks:
- Include all relevant information in the markscheme in your answer.
- Convey this information in a clear, effective and complete manner.
What to Write: Using the Markscheme and Command Terms
To maximise your score based on the rubrics, you must first include all relevant information in the markscheme.
To do so, you must understand the command terms used in each question. Command terms indicate the depth of response required, and what examiners look out for in Paper 3 essays.
There is only 1 command term for Paper 3 exams: Recommend.
| Command Term | Definition |
| Recommend | Present an advisable course of action with appropriate supporting evidence/reason in relation to a given situation, problem or issue. |
Recommend
This requires you to suggest one course of action with detailed reasons and supportive evidence in relation to the issues outlined throughout the question.
Unlike Paper 1 and 2 essays, notice that the rubric does not include any mentions of diagrams. Hence, you do not need to draw a diagram for Recommend a Policy questions in Paper 3.
While this saves you time, it means you only have one opportunity to show detail: In your written explanation.
To show detail in your written explanation, you must use a mix of economic theory from the textbook, together with evidence from the question and text. You may think of this as a shortened version of Paper 2 part (g) essays, albeit without the diagram.
At EconPrep, we never recommend students memorise one golden technique or ‘hack’ to answer exam questions.
Rather, we highly recommend understanding best practices and adding various frameworks to your toolkit. These help you adapt your response techniques to the demands of the question, so you can convey your understanding clearly.
We cover these in the next section.
EconPrep’s Paper 3 Best Practices
With years of experience analysing Paper 3’s objectives, assessment rubrics and a range of students’ essays, we’ve put together a list of Best Practices for acing the Paper 3 exam.
Revising for Paper 3
- Memorise key formulas and understand their applications. While Paper 3 is a policy paper, there are plenty of calculation-based questions too. Note that no formula booklet will be provided for Paper 3.
- Show your workings clearly even in your practice papers or exams.
- Always include units in your workings and calculations! Make this a habit early.
- Familiarise yourself with the IB Command Terms.
- Plot graphs and charts when practising, so you get a feel of time taken and its approach before the exam.
- Learn to interpret tables, graphs and charts to identify trends and anomalies. This may be helpful when you need to recommend policies.
- Practise (hand)writing your evaluations. This helps you structure your points clearly and enable you to get a feel for how writing in the exam feels like.
Structuring Your Responses
Before Writing
- Use reading time wisely. Unlike previous papers where you use your reading time to select questions, use reading time to understand the overarching concept of each question, so you spend less time trying to recall this when you need to recommend a policy.
When Writing
- For part (a) questions, 1 mark = 1 written point. Structure your responses accordingly.
- Answer both questions for Paper 3 – you don’t have a choice of questions here.
- Write in the boxes provided. Ask for additional paper if you need more. Do not cut corners here, it’s a terrible feeling to get marks deducted because of this.
EconPrep breaks down best practices for each question type.
| Part (a) | Tests AO1, AO2 and AO4: knowledge and understanding, application and analysis, and use of appropriate skills.To enjoy full marks per question, write the equivalent number of written parts or key phrases per question. Be detailed and specific.Show all working clearly.Round off to 2d.p. only at the final answer. 2d.p. means two digits after the decimal point.‘Error carry forward’ or ‘Own figure rule’ applies here. This means that even if your final number is incorrect, you may be awarded method marks if you show your working. Hence show all your workings clearly.Include all units correctly.Strive to score full marks for parts (a). It’s ok to spend more time on these to maximise probability of scoring full marks here. |
| Part (b) | Tests AO1, AO2, AO3 and AO4: knowledge and understanding, application and analysis, synthesis and evaluation, and use of appropriate skills.Focus on clarity and structure, instead of overwhelming/flooding the reader with theory and details. Use the ‘PEEL’ format.EconPrep Paper 3 ‘Recommend a Policy’ Framework provides a structure you can adopt.Recommend only one policy.You do not need a diagram for Paper 3 part (b) questions. Recall that if you draw a diagram, you need to spend additional time explaining it, which could have been used to evaluate your policy more effectively.Remember – the examiner is not scoring your ability to regurgitate/memorise from the textbook. The examiner is scoring your ability to use relevant theory and make evaluations based on the real information given in the article. |
With each question type’s objective covered, below we share a key Paper 3 framework to address ‘Recommend a Policy’ questions.
EconPrep Paper 3 Framework: ‘Recommend a Policy’ Questions
Part (b) question in Paper 3 invites you to recommend a policy to address an issue presented in the question.
The IB Guide defines ‘recommend’ as – to present an advisable course of action with appropriate supporting evidence/reason in relation to a given situation, problem or issue.
| Step 1: Ask before Writing – What is the actual issue/problem in this question? What policies have I learnt to address this issue? Of these policies, which is the best for this question’s context, and why? |
| Step 2: State and Explain – State and fully explain an appropriate policy. An explanation entails a definition, and briefly writing how the policy will solve the question’s issue/problem.*Important: Give only 1 policy! Do not assume that writing more policies = a higher score. Examiners are specifically instructed to only mark the best policy, if a few are given. |
| Step 3: Elaborate – Support your recommended policy with relevant economic theory; remember to combine information from text (use quotes “”) with your knowledge of Economic theory. *Unlike Paper 2, there is no need to draw a diagram at all in Paper 3 part (b) questions. |
| Step 4: Evaluation – Evaluate key concepts/policies via CLASPP in context of article’s information and data. *Evaluation must be (1) balanced and (2) effective. Learn more in our commentary. |
| Step 5: Conclusion – End off with a reasoned argument of how your recommended policy is best to address the question’s issue/problem, based on your response above.*Summary ≠ Reasoned argument ≠ Evaluation! Learn more in our commentary. |
| 🤔 Want to Learn More Frameworks?Learn over 10 sets of IB Economics frameworks for Papers 1, 2 and 3 when you join EconPrep’s Crash Courses or Tutoring cohorts. These frameworks build on our free resources, and are perfect if you need that extra push and personalised guidance. If not, our free resources are enough to help you ace your exams. Want more free resources or information about us? Check us out here! |
Budgeting Your Time
- You have 5min reading time + 1h 45min (105min) to answer 2 questions.
- Hence, you have ~50min to answer each question (both parts a and b).
- Allocate more time to scoring most marks for part (a).
- EconPrep’s recommendation:
- Reading – 5min reading time
- Writing Q1 Part (a) – 30min
- Writing Q1 Part (b) – 20min
- Writing Q2 Part (a) – 30min
- Writing Q2 Part (b) – 20min
- You do not need to follow this recommendation. Budget your time based on what works for you.
Best Practices for Exam Preparations
Understand the Formulas
- Know the Quantitative Techniques: Master all formulas and calculations required in the syllabus, such as PED, GDP deflator, and Gini coefficient.
- Ensure you know how to sketch and plot different diagrams.
Use Past Papers to analyze questions, time yourself and review feedback
Analyze past Paper 3 questions by:
- Understanding recurring themes: Review multiple years of past papers to identify frequently tested topics.
Time yourself by:
- Setting a timer: Allocate 30 minutes for parts (a), and 20 minutes for part (b).
- Avoiding distractions: Treat each practice session as if it were the real exam—no phones, no interruptions.
- Tracking your progress: Note how long you take for each part and aim to improve your efficiency without sacrificing quality.
Review feedback by:
- Spotting patterns in examiners’ feedback: Use examiner reports (if available) to understand common mistakes and learn what high-scoring answers look like.
- Focusing on tricky areas: For example, students often struggle with Part (b). Use past papers to develop this skill.
Mark Your Own Work (or engage another pair of eyes like EconPrep)
- Use IB mark bands: Refer to the Paper 3 rubrics while reviewing your answers. Assess yourself against each level to see where you stand.
- Pay attention to careless mistakes, or calculations which you find yourself frequently tripping up on.
- Check key elements: Ask yourself:
- Did I fully define and explain my recommended policy?
- Is my explanation logical and connected to the question’s context?
- Did I quote and use evidence or data from the question effectively?
- Did I provide my own perspectives and inputs for Part (b), beyond what is shared with me in the article and from the textbook?
- Be objective: While self-marking, put yourself in the examiner’s shoes. It’s better to grade yourself slightly harshly than too leniently.
- Analyze mistakes: Note recurring errors, like mislabeling diagrams, incomplete evaluations, or weak links between theory and the article.
- Set improvement goals: For example, if you struggle with evaluation, practice writing structured “It depends on…” statements in your next session.
- Track progress: Keep a log of your scores for practice essays and aim for consistent improvement.
Learn from Model Answers
- Understand structure: Observe how answers transition smoothly between points and end with a clear conclusion.
- Compare to your work: Identify gaps between your answers and the model to refine your technique.
- Learn talking points: For policy questions, absorb how certain policies are explained and evaluated, and if there are any trade-offs being made in its selection and implementation.
- Rewrite in your own words: After reviewing a model answer, rewrite it using your style and examples to internalize the structure.
- Avoid over-reliance: Use model answers as a guide, not a script. Your answers should reflect your understanding, not mimicry.
Other Best Practices & Tips
- Work in Study Cycles: Dedicate blocks of time to specific sections (e.g., 1 hour on practising calculations) to ensure balanced coverage of the syllabus.
- Collaborate with Peers: Share and discuss answers with classmates or your tutor to gain new perspectives and constructive feedback.
- Review Core Concepts: Regularly revisit key theories, definitions, and diagrams to keep them fresh in your mind.
- Use Online Resources: Check out other platforms like IB-specific forums, YouTube (EconPrep’s YouTube), and economic news outlets to learn fresh insights and examples.
Common Challenges and How to Overcome Them
Ambiguous Questions
Ambiguity in questions exists due to tricky phrasing, which could confuse you (especially in an exam setting). To overcome this, focus on key demands of the question.
- Start by paying attention to what the question wants you to solve for, especially for calculation questions.
- Break the question into smaller parts. For example:
- What theory or concept is being tested?
- Does the question require diagrams, examples, or both?
- If unsure, revisit the syllabus to ensure your response aligns with the topic’s learning outcomes.
- Practice paraphrasing questions during revision to train your brain to reframe ambiguous phrasing into clearer terms.
Balancing Depth vs.Breadth
When to Prioritize Depth:
- When the question involves evaluation (Part b), provide detailed analysis on one or two key points rather than a superficial overview of many.
When to Prioritize Breadth:
- Use breadth for evaluation to consider multiple perspectives, especially material that is not explicitly mentioned in the question. For example, when discussing fiscal policy, mention short-term and long-term impacts, stakeholders, and external constraints.
Burnout
Burnout is a very real issue during the IB journey. Some techniques to manage burnout (that have worked for me) include:
- Using Effective Study Techniques:
- Pomodoro Technique: Study for 25 minutes, then take a 5-minute break. After 4 cycles, take a longer 15–30 minute break.
- Active Recall and Spaced Repetition: Regularly quiz myself on key terms, diagrams, and theories. Use flashcards or apps like Anki.
- Mind Mapping: Create visual mind maps to connect concepts like supply, demand, elasticity, and market structures.
- Rotate between topics to prevent monotony and ensure well-rounded preparation.
- Taking Meaningful Breaks:
- Step away from study materials during breaks. Engage in activities like walking, stretching, or listening to music.
- Practice mindfulness techniques such as deep breathing to reset my focus.
- Avoid using breaks for passive scrolling on social media, as it may lead to distractions.
- Recognizing and Managing Stress:
- Notice early signs of burnout, such as difficulty concentrating, irritability, or physical fatigue.
- Seek support from peers, teachers, or tutors if I’m struggling with a particular topic or feeling overwhelmed.
- Remember that consistency matters more than perfection. It’s better to have a solid grasp of 90% of the syllabus than to overstress about mastering everything.
Other Challenges
- Crafting Clear Evaluations
- Use frameworks like “It depends on…” and “Assuming that…” to ensure your evaluation shows depth.
- Compare perspectives, such as short-term vs. long-term impacts or the views of different stakeholders (e.g., consumers vs. producers).
Final Exam Day Prep List
What to Bring
- Stationery Essentials
- Pens: Bring at least two black or blue pens. These are the only acceptable colors for the IB exam.
- Pencils: Keep sharpened pencils for diagrams.
- Eraser: A clean eraser is crucial for amending diagrams without leaving marks.
- Ruler: A small, straight ruler ensures neat and accurate diagrams, which can impress examiners.
- Transparent Water Bottle
- Watch: Use a simple analog watch to manage your time effectively. Smartwatches are not allowed.
- Admission Slip: Double-check that you have the necessary identification and paperwork required to enter the exam hall. Remember your school and individual ID.
Mindset Tips
- Breathe: If you feel anxious, pause for a moment and take deep breaths to steady yourself.
- Break Down the Task: Remember, Paper 1 is just two parts. Focus on each part as a small goal rather than the entire paper.
- Focus on What You Know: Answer the parts of the question you’re confident about first to build momentum.
- Stick to a Plan: Spend 25–30 minutes on Part (a) and 40–45 minutes on Part (b), leaving 5–10 minutes to review your answers.
- Track Time: Check your progress after every 20 minutes to ensure you’re on schedule.
- Don’t Dwell: If stuck on a part of the question, move on and return later if time permits.
Last-Minute Revision
- Formulas and Graphs: Ensure you can recall all formulas, and plot critical diagrams such as:
- AD-AS Curve: For macroeconomic analysis.
- PPC (Production Possibility Curve): For opportunity cost and efficiency.
- Elasticity Diagrams: PED, PES, etc.
- Market Structures: Perfect competition, monopoly, and monopolistic competition diagrams.
- Definitions: Review precise definitions for frequently used terms (e.g., opportunity cost, inflation, elasticity). Starting your answers with accurate definitions sets the tone for a strong response.
Practical Tips for Exam Day
Before Entering the Hall
- Arrive Early: Reach the venue at least 30 minutes early to settle any logistical issues and calm pre-exam jitters.
- Avoid Overloading Your Brain: Avoid cramming new information; instead, briefly skim through key notes.
During the Exam
- Read Questions Carefully: Spend 2–3 minutes analyzing the question to ensure you fully understand the requirements.
- Write Clearly: Examiners appreciate legible handwriting and well-organized answers.
- Stick to the Plan: Stay focused and follow your time allocation plan to avoid rushing.
After the Exam
- Reflect, Don’t Stress: Avoid discussing the exam immediately after; focus on resting and preparing for the next paper.
