Paper 3 (DP IB Economics): Revision Note

What is the structure of Paper 3?

Overview

• Paper 3 assesses your ability to apply quantitative techniques, interpret economic data, and use this evidence to justify a policy recommendation

• This paper is Higher Level only

• From May 2024 onwards, Paper 3 has been significantly expanded in both length and mark allocation, with a stronger emphasis on:

  • sustained quantitative reasoning

  • consistent use of data across questions

  • integration of calculations, diagrams and theory

Overall paper structure (from May 2024)

• Two compulsory questions

• Students answer ALL questions

• Total marks: 60

• Time allowed: 1 hour 45 minutes

• Calculator permitted

• All answers must be written in the answer boxes provided

• All workings must be shown

• Numerical answers must be:

  • exact, or

  • correct to two decimal places, unless stated otherwise

• Important note: This is no longer a “choose one question” paper

Question structure

Part (a): Quantitative and analytical tasks

• Multiple subparts, typically (i)–(x)

• Short-answer questions worth 1–4 marks each

• Focused on:

  • definitions

  • calculations

  • interpretation of data

  • diagram construction and explanation

  • short, applied economic reasoning

Part (b): Policy recommendation

• 10 marks

• One extended response per question

• Requires a single, clearly justified policy recommendation

• Each question integrates microeconomics, macroeconomics, and international economics, depending on the context.

Part (a): What is assessed

• Part (a) assesses students’ ability to work accurately and methodically with data

• Typical skills tested include:

  • Calculating:

    • balances (eg current account)

    • price changes using exchange rates

    • expenditure, revenue, surplus and welfare effects

    • multiplier effects

  • Interpreting:

    • time-series data

    • tables

    • diagrams

  • Constructing and explaining:

    • exchange rate diagrams

    • tariff and subsidy diagrams

    • monopoly diagrams

    • poverty cycle diagrams

  • Using data explicitly referenced in the question

• Marks are awarded for:

  • correct method

  • clear workings

  • correct units

  • accurate interpretation

• Even if the final answer is incorrect, method marks can still be awarded

Use of diagrams in Part (a)

• Diagrams must be:

  • accurate

  • fully labelled

  • directly linked to the question

• Explanations must refer to features of the diagram, not just describe theory in isolation

• Diagrams that are correct but not explained will not access full marks

Part (b): Policy recommendation (10 marks)

• Part (b) requires students to recommend one policy in response to the economic issue presented in the data

What examiners are looking for

• Examiners assess how well the student demonstrates:

  • Clear identification of one appropriate policy

  • Accurate explanation of how the policy works

  • Explicit use of data, trends, and results from part (a)

  • Application of relevant economic theory

  • Balanced evaluation, considering:

    • benefits

    • limitations

    • short-run vs long-run effects

    • feasibility given constraints in the data

  • A reasoned final judgement

• High-scoring answers consistently:

  • reuse numerical results from earlier parts

  • refer back to diagrams and calculations

  • stay focused on the specific context of the country or market

Critical examiner expectations

• Part (b) must build directly on part (a)
  Answers that ignore earlier calculations or data cannot reach the top mark bands.

• Only one policy should be recommended
  Listing multiple policies reduces depth and weakens evaluation.

• Paper 3 is not an essay paper
  Long, generic explanations without quantitative support result in significant mark loss

What examiners reward overall

• Across the whole paper, examiners reward:

  • logical progression from data → analysis → policy

  • consistent use of numerical evidence

  • precise terminology

  • diagrams used analytically, not decoratively

  • focused, evidence-based judgement

• They penalise:

  • missing workings

  • incorrect units or rounding

  • ignoring the data provided

  • essay-style responses detached from calculations

  Time management guidance

• Work carefully through Part (a); accuracy matters

• Do not rush calculations

• Keep track of results that can be reused in Part (b)

• Leave sufficient time to:

  • plan the policy response

  • structure evaluation

  • reach a clear conclusion

• A common weakness is underdeveloped evaluation due to poor time allocation.