There's a lot of that about.

Ibsen's Peer Gynt is Voltaire's Candide.
Priestley's An Inspector Calls is Gogol's Revisor.
Various authors retell the story of Don Juan.
White's The Once and Future King is Mallory's La Morte d'Arthur.

Which is not to say that an author is just paraphrasing or plagiarising a source. Goethe for instance embeds the tale into the Weimar romanticism and into the contemporary world view and weaves in some suitable moral plot around Gretchen and the murder and Faust's pleading with God; in the earlier versions the morality is much more cut and dried, you treat with the Devil, you go to Hell. The Priestley / Gogol example (and I don't know that it's a conscious copy) is an exactly similar plot, down to the detail of everyone being thunderstruck when the arrival of a "real" inspector is announced, but exposes the attitudes of the English middle-class rather than satirising those of small-town Russia.

It's not the same as allusion though, where the author is taking various ideas, themes, motifs, characters, literary techniques and plot elements and weaving them into his work together with a bunch of stuff of his own (or retold from earlier works). In the context of the exam. question, for instance, it would be important to separate the elements that allude to Classical elements from the elements that derive from plot retelling; the Faust story goes back to German stories ostensibly based on a real person, Johann Georg Faust (c. 1480 - 1540) but more probably derived from a number of different persons and legends and composited by Marlowe or others; as may be the case with Merlin, likewise a composite character integrated by Geoffrey of Monmouth in the thirteenth century. See
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Edited by chateauferret (14 Feb 2018 10.27pm)