OCR A Level Economics: Demand, supply and consumer and producer surplus (H460) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover the first part of the topic Supply and demand and the interaction of markets in Component 1 (Microeconomics) of OCR’s A Level Economics specification (H460), Version 3.0 of June 2026, first assessed in 2021. The teaching sits in the study guide and the revision notes. Course pages: the OCR Economics hub, the checklist and the free diagnostics. All contexts and figures are invented.

Questions

1. State the type of demand shown in each case. [4]

• Builders demand bricks because households demand new houses.
• Households switch from rice to noodles when rice becomes dearer.
• Households buy printers and ink cartridges together.
• Timber is wanted by furniture makers, as fuel and for paper.

2. The table shows weekly demand for a good by three households in a small town (illustrative).

Price (£)	Household A	Household B	Household C
2	12	8	6
4	9	6	4
6	6	4	2
8	3	2	0

(a) Calculate market demand at each price. [2] (b) Household C leaves the town. State what happens to market demand at £6, and say whether the demand curve itself moves or the market slides along it. Explain. [3]

3. A consumer’s marginal utility, in £, from sandwiches one to five is 6.00, 4.50, 3.00, 1.50 and 0.50.

(a) State how many she buys at £2.50 and explain using marginal utility. [2] (b) Calculate her consumer surplus at £2.50. [2] (c) The price falls to £1.00. Calculate her new consumer surplus and the change. [3]

4. A consumer spends all her income of £240 on one normal good.

(a) The price falls from £6 to £4. Calculate how many more units she can afford. [2] (b) Explain, using both the substitution and income effects, why quantity demanded rises. [4]

5. Demand for good Z is Q = 80 − 5P (Q units, P in £).

(a) Calculate Q at £6 and at £4, and name the change. [3] (b) Incomes rise and demand becomes Q = 100 − 5P. Calculate Q at £6 and name the change. [2] (c) State two other factors that could shift demand. [2]

6. Demand for a good is P = 36 − 6Q (Q in thousands, P in £).

(a) Calculate consumer surplus at £18 and at £12. [2] (b) Calculate the change when price falls from £18 to £12. [1] (c) Split the change into a rectangle and a triangle, saying who gains each. [2]

7. Evaluate the claim that a fall in the price of a good always raises consumer surplus. Use P = 28 − 4Q in your answer. [8]

8. (a) Identify the type of supply in each case. [3]

• A farm sells lamb and wool from the same flock.
• A bakery switches its ovens between bread and cakes.
• A quarry supplies stone for road building and for housing.

(b) The price of lamb rises. Explain the effect on the supply of wool. [2]

9. Three firms supply 40, 25 and 15 units at £10.

(a) State market supply at £10. [1] (b) New rules raise costs so each firm supplies 20 per cent less at every price. Calculate new market supply at £10. [2] (c) State whether this is a movement or a shift, and explain. [2] (d) Instead, a new firm entering supplies 10 units at £10. State market supply. [1]

10. Supply is P = 5 + 2.5Q (Q in hundreds, P in £).

(a) Calculate producer surplus at £15. [2] (b) Price rises to £20. Calculate producer surplus. [2] (c) Calculate the change and split it into a rectangle and a triangle. [3]

11. In the market for good Y (illustrative), demand is P = 26 − 2Q. Supply is first P = 2 + 2Q, and the market trades at £14 and 6 thousand units. A new technology gives supply P = 2 + Q, and the market then trades at £10 and 8 thousand units.

(a) Calculate consumer surplus and producer surplus before and after. [4] (b) Evaluate whether producers are worse off. [6]

Answers

1. Derived demand [1]; competitive demand [1]; joint demand [1]; composite demand [1]. [4] Examiner insight: Name the type and tie it to the case in a few words; a label with no link to the stem is hard to credit as showing understanding.

2. (a) Add quantities across at each price: £2: 12 + 8 + 6 = 26 [1]; £4: 19; £6: 12; £8: 5 [1]. [2] (b) Without C, demand at £6 is 12 − 2 = 10 [1]. It is a decrease in demand, a shift left [1], because fewer buyers change the quantity wanted at every price, while the price itself has not moved [1]. [3] Examiner insight: Show the addition at each price so a slip is visible, and say why the cause is not the good’s own price.

3. (a) She buys 3 [1]: the third sandwich is worth 3.00, at least the price, but the fourth is worth only 1.50, below it [1]. [2] (b) (6.00 − 2.50) + (4.50 − 2.50) + (3.00 − 2.50) = 3.50 + 2.00 + 0.50 [1] = £6.00 [1]. [2] (c) Now she buys 4, since 1.50 exceeds £1.00 but 0.50 does not [1]. Surplus = 5.00 + 3.50 + 2.00 + 0.50 = £11.00 [1]. Change = +£5.00 [1]. [3] Examiner insight: Compare each unit’s marginal utility with the price one unit at a time, and sum the gaps rather than guessing an area.

4. (a) 240 ÷ 6 = 40 units and 240 ÷ 4 = 60 units [1], so 20 more [1]. [2] (b) Substitution: the good is cheaper relative to others [1], so consumers switch towards it and away from dearer alternatives [1]. Income: the price fall raises real income, as part (a) shows [1], and for a normal good some of this extra purchasing power is spent on more of it [1]. [4] Examiner insight: Treat the two effects as separate chains and say what each one does to quantity; a single sentence covering both is harder to credit.

5. (a) At £6, Q = 80 − 30 = 50 [1]. At £4, Q = 60 [1]. This is an extension of demand [1]. [3] (b) At £6, Q = 100 − 30 = 70 [1]. Demand has increased, so the curve moves right [1]. [2] (c) Any two: price of a substitute or complement, tastes or advertising, population, expectations, credit conditions [1][1]. [2] Examiner insight: Use the terms extension and increase for the right cause. A price change alone is never a shift.

6. (a) At £18, Q = 3, surplus = ½ × 3 × 18 = £27 thousand [1]. At £12, Q = 4, surplus = ½ × 4 × 24 = £48 thousand [1]. [2] (b) 48 − 27 = £21 thousand [1]. [1] (c) Rectangle 3 × 6 = 18, the gain to existing buyers [1]. Triangle ½ × 1 × 6 = 3, the gain to new buyers [1]. Total 21. [2] Examiner insight: Show the height of each triangle as the gap between the curve’s intercept and the price; this is where slips occur.

7. Consumer surplus is the area between the demand curve and the price line [1]. On P = 28 − 4Q, a price of £12 gives Q = 4 and surplus ½ × 4 × 16 = 32. If price falls on an unchanged curve, existing buyers gain a rectangle [1] and new buyers a triangle [1], so surplus rises. But the claim says always. Suppose price falls to £10 because demand decreases to P = 20 − 4Q [1]. Then Q = 2.5 and surplus = ½ × 2.5 × 10 = 12.5, below 32 [1]. So the cause of the fall matters. Cheaper consumption of a harmful good, or a price cut that comes with lower quality, can leave consumers or society worse off [1]. Money measures also treat a pound alike for rich and poor, and demand curves are estimates [1]. Judgement: the claim holds when the demand curve stays put, for example after an increase in supply, but not always [1]. [8] Examiner insight: Separate the price fall from its cause, then reach a judgement; listing caveats without a conclusion leaves the evaluation unfinished.

8. (a) Joint supply [1]; competitive supply [1]; composite supply [1]. [3] (b) A higher lamb price makes it profitable to rear more sheep [1], so more wool is produced and the supply of wool increases (shifts right), which tends to lower the price of wool [1]. [2] Examiner insight: Finish the chain by naming the curve that moves and its direction.

9. (a) 40 + 25 + 15 = 80 [1]. [1] (b) Firms supply 32, 20 and 12 [1], so market supply = 64 [1]. [2] (c) It is a shift left, a decrease in supply [1], because costs, not the price, have changed and the quantity at every price changes [1]. [2] (d) 80 + 10 = 90 [1]. [1] Examiner insight: Work each firm separately before totalling; it makes the source of any error clear.

10. (a) At £15, Q = (15 − 5) ÷ 2.5 = 4. Surplus = ½ × 4 × 10 = £20 [1][1]. [2] (b) At £20, Q = 6, surplus = ½ × 6 × 15 = £45 [1][1]. [2] (c) Change = £25 [1]. Rectangle 4 × 5 = 20 [1]; triangle ½ × 2 × 5 = 5 [1]. [3] Examiner insight: Use the supply intercept as the base of the height, not zero.

11. (a) Before: CS = ½ × 6 × (26 − 14) = 36 [1]; PS = ½ × 6 × (14 − 2) = 36 [1]. After: CS = ½ × 8 × (26 − 10) = 64 [1]; PS = ½ × 8 × (10 − 2) = 32 [1]. [4] (b) Producer surplus falls from 36 to 32 [1] even though output rises, because the price falls by more than the extra volume makes up [1]. But surplus is not profit: the cost of installing the technology and fixed costs are not shown [1]. Consumers gain 28 and total surplus rises from 72 to 96 [1]. The result depends on the straight-line curves and on whether all firms adopt the technology, which the figures do not show [1]. Judgement: on these figures producers’ measured surplus is slightly lower, but their position depends on costs outside the diagram, so “worse off” is not proven [1]. [6] Examiner insight: Support each claim with a figure from part (a), then weigh what the diagram leaves out.

Where marks are usually lost

• Calling a price-driven change a shift of the curve, or a non-price change a movement.
• Adding prices instead of quantities to build market demand.
• Using the wrong triangle height for surplus.
• Leaving out the rectangle when surplus changes with price.
• Giving only the calculated surplus without saying who gains it.
• Listing evaluative points without a judgement.
• Mixing up composite demand (uses), joint demand (complements) and competitive demand (substitutes).
• Treating producer surplus as the same thing as profit.

Next steps

• Revisit the revision notes and the study guide.
• Course pages: the OCR Economics hub and the checklist.
• Take the free diagnostics to find weak spots.
• Want help in person? Book a free trial class.

Official syllabus

OCR’s A Level Economics specification (H460), published by OCR, Version 3.0 (June 2026), for first assessment in 2021. Sections used: the first part of the Supply and demand and the interaction of markets topic, in Component 1 (Microeconomics).