Scarcity
Finite resources are insufficient to satisfy unlimited wants, so every decision has an opportunity cost.
Which scarce resources does diet-related ill health use, and what alternatives are forgone?
IB Economics key concepts
Nine ways to look at an economic issue
Use the key concepts to decide which relationships matter, who is affected and what needs to be evaluated.
Choice
Scarcity makes choice unavoidable for consumers, firms and governments, each responding to incentives and constraints.
How did the levy alter the choices available to firms and consumers?
Efficiency
Efficiency concerns whether scarce resources are allocated to maximise total social surplus and avoid waste.
Did the levy move consumption closer to the socially efficient quantity?
Equity
Equity concerns fairness in the distribution of income, opportunity, costs and benefits.
Were the financial burden and health benefits distributed fairly?
Economic well-being
Economic well-being includes material living standards, health, security and access—not income alone.
Did lower sugar exposure improve well-being after accounting for prices, choice and health?
Sustainability
Sustainability asks whether outcomes can be maintained over time without undermining future economic, social or environmental well-being.
Will reformulation and lower sugar consumption persist as markets and behaviour adapt?
Change
Change focuses on how economic conditions, behaviour and institutions evolve across time.
Was the decisive change a movement in price and quantity, or a transformation of the product itself?
Interdependence
Interdependence describes how decisions by one economic actor or market create consequences for others.
How did responses by firms, consumers, government and the health system depend on one another?
Intervention
Intervention occurs when government changes market incentives, rules or provision to pursue economic and social objectives.
Was a tiered levy the most effective and proportionate response to the market failure?