OCR A Level Economics Paper 1 May 2026 – Microeconomics Question Paper (H460/01)

Official OCR A Level Economics Paper 1 (H460/01) Microeconomics exam – May 2026 series. Includes full question paper with Section A short-answer and data response (40 marks) and Section B essay questions (40 marks). Covers core microeconomic topics: price elasticity of demand (PED) calculation and interpretation (25% price increase, quantity from 500 to 400, PED = -0.8 inelastic), factors influencing PED (number of substitutes, necessity vs luxury), PED diagram for pricing decisions (elastic vs inelastic demand and total revenue), tariff diagram (world price below domestic equilibrium, import quantity Qd-Qs, tariff wedge reducing imports), disadvantages of tariffs for consumers (higher prices, reduced consumer surplus, less choice), asymmetric information (definition, Akerlof “lemons” market failure in used cars, adverse selection), government interventions in health insurance (mandatory purchase, regulation, subsidies), consumer surplus and producer surplus diagrams with competitive market efficiency (total surplus maximised at equilibrium), evaluation of government intervention vs free markets (market failure – externalities, public goods, merit/demerit goods; government failure – regulatory capture, unintended consequences, information gaps), monopoly market structure (characteristics: single seller, high barriers to entry, price maker, supernormal profits in long run due to entry barriers), monopoly diagram (ARAC at profit-maximising MC=MR output), evaluation of monopolies as harmful (higher prices, lower output, X-inefficiency, less choice) vs beneficial (economies of scale, natural monopoly, dynamic efficiency, research and innovation). Includes formulas (PED, YED, XED, PES, TC, AC, MC, TR, MR, profit maximisation MC=MR, concentration ratios, social cost/benefit), diagram references for each question, marking guidance (assessment objectives AO1–AO4, QER level descriptors Level 1-5), command word definitions, and real-world examples (sugar tax, carbon pricing, minimum unit pricing alcohol, Google, Amazon, Network Rail). Perfect for OCR A Level Economics revision, microeconomics exam practice, and teacher/student exam preparation.