OCR A-Level Economics 2027 Predicted Practice Paper — Microeconomics

Answer ALL questions. Write your answers in the spaces provided. You must write down all the stages in your working.

Section A

Stimulus-based microeconomics questions. Answer all questions in Section A.

• 1

  Question SECTION-A1 (4 marks)

  Extract A (invented data): In the fictional city of Marrowfield, the price of a monthly gym membership rose from GBP 30 to GBP 36. Over the same period, the quantity of memberships demanded fell from 20,000 to 17,000 per month, holding other factors constant. Calculate the price elasticity of demand for gym memberships in Marrowfield, showing your working, and state whether demand is elastic or inelastic. (4 marks)

  (Total for Question SECTION-A1 is 4 marks)
• 2

  Question SECTION-A2 (5 marks)

  Extract B (invented context): Marrowfield Council is considering a per-unit subsidy paid to firms supplying rooftop solar panels, on the grounds that solar generation creates positive externalities. Using a supply and demand diagram, explain how such a subsidy would affect the equilibrium price paid by consumers and the equilibrium quantity of solar panels traded. (5 marks)

  (Total for Question SECTION-A2 is 5 marks)
• 3

  Question SECTION-A3 (3 marks)

  Extract C (invented context): A large supermarket chain, ValuMart, cuts the shelf price of its own-brand bread below the price charged by a small independent bakery next door. Explain one reason why ValuMart may be able to sustain a lower price than the independent bakery. (3 marks)

  (Total for Question SECTION-A3 is 3 marks)
• 4

  Question SECTION-A4 (4 marks)

  Extract D (invented data): The table below shows a firm's short-run output as it hires more workers, with all other inputs fixed. Workers: 1 -> Total output 8 units; 2 -> 20; 3 -> 30; 4 -> 36. Calculate the marginal product of the 3rd and 4th workers, and use your results to explain what is happening to the marginal product of labour. (4 marks)

  (Total for Question SECTION-A4 is 4 marks)
• 5

  Question SECTION-A5 (6 marks)

  Extract E (invented context): In Marrowfield the market for taxi journeys has one dominant app-based operator holding around 80% of rides, alongside several small firms. Explain two characteristics of this market that suggest it is closer to a monopoly than to perfect competition. (6 marks)

  (Total for Question SECTION-A5 is 6 marks)
• 6

  Question SECTION-A6 (8 marks)

  Extract F (invented context): Marrowfield Council introduces a maximum price (price ceiling) on private rented flats set below the free-market equilibrium rent. Analyse the likely effects of this price ceiling on the market for rented flats. (8 marks)

  (Total for Question SECTION-A6 is 8 marks)

Section B

Choice of microeconomics essay. Answer all questions in Section A.

• 1

  Question SECTION-B1 (25 marks)

  Evaluate the view that the most effective way for a government to reduce the consumption of demerit goods (such as sugary drinks) is to impose an indirect (specific) tax. Refer to relevant economic theory, diagrams and real or plausible examples in your answer. (25 marks)

  (Total for Question SECTION-B1 is 25 marks)

Section C

Choice of microeconomics essay. Answer all questions in Section A.

• 1

  Question SECTION-C1 (25 marks)

  Discuss the extent to which the existence of monopoly power in a market is always harmful to consumer welfare. Use relevant economic theory, diagrams and examples to support your answer. (25 marks)

  (Total for Question SECTION-C1 is 25 marks)