Business Studies Multiple Choice Question – 24 April 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Business Studies
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Increasing incomes in the UK economy result in a greater demand for clothing at all price levels.

Clothing is therefore best described as?

Select ONE answer:

  1. a normal good
  2. an inferior good
  3. a substitute good
  4. a complementary good

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct – A normal good has a positive income elasticity of demand. As incomes rise consumers have more disposable income. Consumers are likely to choose to spend the increased.
  2. Not correct – inferior goods would see a decrease in demand as consumers switch to more normal goods/it has a negative YED.
  3. Not correct – clothing is not being used as an alternative to another product.
  4. Not correct – clothing is not directly linked to any other product and clothing can be purchased independently from other goods.

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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