OCR A Level Economics: Thinking synoptically: micro and macro in an unseen theme (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 follow Component 03, Themes in economics, of the OCR A Level Economics (H460) specification, Version 3.0 (June 2026), for first assessment in 2021. The component has no prescribed content, so the questions mix micro and macro skills. Every country and figure is invented. Money is in currency units (cu). Read the study guide and revision notes first. See also the OCR Economics hub, the printable checklist and the free diagnostics.

Questions

1. Multiple choice. Choose the best answer for each part.

(a) Nominal GDP in Country M rises by 5% while the price level rises by 3%. Real GDP growth is closest to: A 8%, B 2%, C 1.5%, D 15%. [1] (b) The price of a good rises by 10% and its PED is -0.4. Total revenue will: A fall, B stay the same, C rise by about 5.6%, D rise by 10%. [1] (c) An injection of cu 6 million enters an economy where withdrawals are 0.2 of each extra unit of income. The total change in income is: A cu 6 million, B cu 24 million, C cu 30 million, D cu 36 million. [1] (d) A price index falls from 125 to 120. The percentage fall is: A 5%, B 4%, C 4.8%, D 5 points. [1]

2. An hourly wage rises from cu 15.00 to cu 15.90. The price index rises from 100 to 103. (a) Calculate the percentage rise in the nominal wage. [1] (b) Calculate the real wage in base-year prices, to the nearest penny. [1] (c) Calculate the percentage change in the real wage. [1]

3. A bus company raises its fare from cu 2.00 to cu 2.30. Weekly passengers fall from 8,000 to 7,000. (a) Calculate the price elasticity of demand, to two decimal places. [2] (b) Calculate the percentage change in revenue and use your answer to (a) to explain it. [2]

4. In Country C households keep 0.10 as saving, hand over 0.15 as tax and send 0.25 abroad as import spending, per extra unit of income received. (a) Calculate the multiplier. [1] (b) The government raises spending by cu 40 million. Calculate the total change in national income. [1] (c) A tax cut lowers the marginal propensity to tax to 0.05. Calculate the new total change in income from the same spending. [1]

5. A print shop sells 250 jobs a week at cu 12.00. Average total cost is cu 10.40. Paper costs cu 2.00 per job and its price rises by 25%. (a) Calculate weekly profit. [2] (b) Calculate new weekly profit and the percentage change in profit. [2]

6. Employment in a region (year 1 = 100) is 105 in year 2 and 112 in year 3. The output index in year 3 is 123.2. (a) Calculate the percentage rise in employment from year 2 to year 3. [1] (b) Calculate the labour productivity index for year 3. [2] (c) Interpret your answer to (b). [1]

7. Explain how a fall in the price of imported components could affect a manufacturer and then the wider economy. [6]

8. The income elasticity of demand for a good is +1.2 and consumers’ incomes rise by 5%. (a) Calculate the percentage change in demand. [1] (b) With a market diagram described in words, explain what happens in this market. [3]

9. Weekly earnings (cu) of seven workers are 240, 250, 260, 270, 280, 300 and 700. (a) Calculate the mean and the median. [2] (b) State which is the better measure of typical earnings, with a reason. [1]

10. Country T is an island. Tourist spending adds cu 30 million a year to its output. Withdrawals are 0.4 of each extra unit of income. Hotel room prices rise from cu 80 to cu 92, because room supply is fixed in the short run. The rent index rises from 100 to 118 and the resident wage index from 100 to 106. (a) Calculate the total change in national income. [2] (b) Calculate residents’ wages in terms of rent (wage index divided by rent index, times 100). [2] (c) Explain two links between this market’s behaviour and the whole economy. [4]

11. Country E imports its energy. The price of energy rises by 40%. Its government considers cutting the tax per unit on energy from cu 0.20 to cu 0.15. Before the cut, price per unit is cu 1.00 and 500 million units are sold. PED for energy is -0.3. Evaluate whether the government should cut the tax. [12]

Answers

1. (a) 1.05 / 1.03 - 1 = 0.0194, so about 2%: B. [1] (b) Quantity falls by 4%, so revenue changes by 1.10 x 0.96 = 1.056: C. [1] (c) Multiplier = 1 / 0.2 = 5, and 6 x 5 = 30: C. [1] (d) 5 / 125 x 100 = 4%: B. [1] Examiner insight: On calculation items, work the answer before reading the options, because options such as “5 points” or “8%” are built from common slips (points for percentages, adding rates).

2. (a) (15.90 - 15.00) / 15.00 x 100 = 6%. [1] (b) 15.90 / 103 x 100 = cu 15.44. [1] (c) (15.44 - 15.00) / 15.00 x 100 = 2.9%. [1] Examiner insight: Keep unrounded values until the end, and divide by the original value.

3. (a) %change in quantity = -1,000 / 8,000 = -12.5%. [1] %change in price = 0.30 / 2.00 = +15%, so PED = -12.5 / 15 = -0.83. [1] (b) Revenue 16,000 rises to 16,100, a rise of 0.625%. [1] Demand is price inelastic (size 0.83 is below 1), so a price rise increases revenue. [1] Examiner insight: A conclusion about revenue is stronger when it cites the size of the elasticity relative to 1, not just the word “inelastic”.

4. (a) Marginal propensity to withdraw = 0.10 + 0.15 + 0.25 = 0.50, so multiplier = 1 / 0.5 = 2. [1] (b) 40 x 2 = cu 80 million. [1] (c) Withdrawals = 0.10 + 0.05 + 0.25 = 0.40, multiplier 2.5, change = 40 x 2.5 = cu 100 million. [1] Examiner insight: Show the sum of the three withdrawals before dividing; stating only “2” leaves your method unclear if the figure is wrong.

5. (a) Revenue = 250 x 12 = 3,000 and cost = 250 x 10.40 = 2,600. [1] Profit = cu 400. [1] (b) Paper rises by 2.00 x 0.25 = cu 0.50, so average cost is 10.90 and profit is 250 x (12 - 10.90) = cu 275. [1] Change = (275 - 400) / 400 x 100 = -31.25%. [1] Examiner insight: Adding the rise to the average cost for one unit and then multiplying by output is quicker, and easier to check, than recalculating every total.

6. (a) (112 - 105) / 105 x 100 = 6.67% (not 7). [1] (b) Productivity index = output index / employment index x 100 [1] = 123.2 / 112 x 100 = 110. [1] (c) Output per worker in year 3 is 10% higher than in year 1. [1] Examiner insight: Interpretation needs the base year named; “productivity is 110” alone does not say what it is compared with.

7. Lower import prices cut the firm’s variable cost. [1] Marginal cost falls, so its supply curve shifts right. [1] In a competitive market, the price falls and output rises. [1] If many firms gain, short-run aggregate supply shifts right. [1] The general price level falls and real GDP rises. [1] Link back: cheaper inputs improve cost competitiveness for exports, while higher output may raise imports, a withdrawal. [1] Examiner insight: Strong answers move through stages, firm then market then economy, and say which stage each sentence is in; a list of results scores less than a connected chain.

8. (a) 1.2 x 5 = 6% rise in demand. [1] (b) Put price on the y-axis and quantity on the x-axis. Demand shifts right from D1 to D2. [1] With an upward-sloping supply curve, equilibrium moves from P1, Q1 to P2, Q2, so both price and quantity rise. [1] The price rise is larger when supply is less elastic. [1] Examiner insight: A description of a diagram must name the axes, curves and equilibrium points; “demand goes up” without a shift does not use the diagram.

9. (a) Mean = 2,300 / 7 = cu 328.57; [1] median (fourth value) = cu 270. [1] (b) The median, because the 700 outlier raises the mean well above what most workers earn. [1] Examiner insight: Naming the outlier as the reason is the point; “median is more accurate” with no reason leaves the judgement unsupported.

10. (a) Multiplier = 1 / 0.4 = 2.5. [1] Change in income = 30 x 2.5 = cu 75 million. [1] (b) 106 / 118 x 100 = 89.8. [1] Residents’ wages buy about 10.2% less rent than in the base year. [1] (c) Fixed room supply in the short run means inelastic supply, so higher demand raises price a lot. [1] The tourism injection raises incomes by a multiple. [1] Higher demand for labour and housing may push up prices across the economy if there is little spare capacity. [1] Residents’ real incomes fall relative to rents, so the gain in total output is unevenly shared. [1] Examiner insight: Each link should state a cause and a consequence at different levels; writing “prices rise” twice about one market repeats a single idea instead of adding a second link.

11. Analysis. The price rise shifts short-run aggregate supply left, causing cost-push pressure. [1] Energy is an input with inelastic demand, so firms cannot cut their use quickly. [1] The tax cut lowers the price by 0.05, or 5%, so quantity rises by 0.3 x 5 = 1.5% to 507.5 million. [1] Revenue falls from 0.20 x 500 = cu 100 million to 0.15 x 507.5 = cu 76.1 million, a fall of about cu 23.9 million. [1] The government’s budget deficit rises. [1] Lower energy costs reduce the cost-push effect on the price level. [1] Evaluation. The cost of the policy is large, since inelastic demand means little extra quantity is bought. [1] A lower price weakens the incentive to conserve and increases emissions, an externality. [1] Energy is a larger share of poor households’ budgets, so a targeted payment might be fairer and cheaper. [1] Borrowing to fund the deficit may crowd out private investment. [1] It depends on the size and duration of the price rise and on spare capacity. [1] Judgement: a temporary, targeted measure is better than a permanent tax cut because it limits the revenue loss. [1] Examiner insight: Attach a reason to each judgement, such as time, scale or stakeholders, and finish with a conclusion that answers “should”; an unexplained “it depends” does little for your argument.

Where marks are usually lost

• Using the later figure as the base when working out a percentage change.
• Reporting percentage points where a percentage is asked, or the reverse.
• Comparing nominal values across years without deflating.
• Giving the sign or size of elasticity without comparing it with 1.
• Summing only two of the three leakages in a multiplier.
• Writing a list of effects without linking micro and macro stages.
• Describing a diagram without naming axes, curves and equilibria.
• Ending an evaluation with “it depends” and no judgement.

Next steps

• Revisit the revision notes and study guide.
• Return to the OCR Economics hub and the printable checklist.
• Take the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

OCR, A Level Economics (H460), Version 3.0 (June 2026), for first assessment in 2021: Component 03 (Themes in economics), the assessment sections and the Quantitative Skills annex.