IB Economics/Microeconomics/Key Terms

Key TermsEdit

Abnormal profits (HL)

Accounting cost/profit (HL)

Ad valorem tax (HL)

Allocative efficiency (HL)

Average costs (HL)

Average revenue (HL)

Barriers to entry (HL)

Break even price (HL)

Buffer stock scheme *Not needed in the current syllabus.

Cartel (HL)

Collusive oligopoly (HL)


Commodity agreements

Contestable market (HL)

Cross price elasticity


Demerit goods

Diminishing marginal returns (HL)

Direct tax

Diseconomies of scale (HL)

Economic cost/profit (HL)

Economies of scale (HL)


Elastic demand

Elastic supply

Equilibrium price


Fixed costs (HL)

Flat rate tax (specific tax) (HL)

Giffen goods (HL)

Incidence of tax (HL)

Income elasticity

Indirect tax


Inelastic demand

Inelastic supply

Inferior goods

Law of demand

Law of diminishing average returns (HL)

Law of diminishing marginal returns (HL)

Law of supply

Long run (HL)


Market failure

Market success

Marginal costs (HL)

Marginal revenue (HL)

Maximum price

Merit goods

Minimum price

Monopolistic competition (HL)

Monopoly (HL)

Natural monopoly (HL)

Negative externalities

Non-collusive oligopoly (HL)

Normal goods

Normal profits (HL)

Oligopoly (HL)

Perfect competition (HL)

Positive externalities

Price discrimination (HL)

Price elasticity of demand

Price elasticity of supply

Product differentiation (HL)

Productive efficiency (HL)

Profit-maximizing level of output (HL)

Public goods


Short run (HL)

Shut down price (HL)



Sustainable development

Total costs (HL)

Total revenue (HL)

Tradeable permits

Variable costs (HL)

Veblem goods (HL)