Economics How to Evaluate?

[-Carl]

I'll be writing my Economics SL exam in two weeks and I'm still confused as to what IB requires from each candidate when they ask them to Evaluate. In part (b) of paper 1, and the last part of each Paper 2 quesfion, each question will ask the candidate to Evaluate something. For example "Evaluate the view that the forces of demand and supply always lead to the best outcome in a free market system?" Would I state the advantages of a free market system (i.e producers may maximize profits and consumers may buy what they like) and the disadvantages, if supply and demand were left to operate alone without government intervention? (i.e externalities, demerit goods , etc) . Finally, I am suppose to make a final judgment. What do they mean by this? Help and examples would be greatly appreciated! :-)

Edited May 1, 2011 by -Carl

[blindpet]

You're definitely on the right track, that's exactly what evaluation is in economics. The final judgment would be saying something like supply and demand can lead to the best outcome where the consumer pays an appropriate price and producers maximize profits but only when there is some degree of government intervention that minimizes externalities and increases disincentives for demerit goods (cigarettes are ridiculously cheap to make and it's only because of tax that fewer people buy them now). Do you see how that's a final judgment? You've basically just tied everything together at the end.

[Felix Lagemann]

Here is what you should remember when evaluating each time:

1. Long-run vs. short-run (are the effects on the economy the same etc.)

2. Stakeholders involved (what effect does this change have on e.g. workers, old, young, urban, unemployment rates, foreign trade and so on)

3. Limitation of theories applied (sticky price/wage theory, how is this information gathered, etc.)

4. Prioritize arguments (what is the best solution, why so?)

Don't forget to use examples of current economic situations, it is always best to use example out of the AI's you wrote.