Day: June 26, 2025

Little Staffie Ltd produces chairs.

An economist working for the firm predicts that if average incomes rise next year, then demand for the firm’s chairs will increase in direct proportion to the rise in incomes (assuming all other factors remain unchanged).

The accuracy of the economist’s prediction depends on whether the chairs produced by Little Staffie Ltd?

Select ONE answer:

1. Are normal goods
2. Have many complementary goods
3. Have few complementary goods
4. Have few substitutes

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 == > With normal goods, if incomes rise demand for the product will rise and this will be the case regardless of the existence of either substitutes or complements.
2. Not correct
3. Not correct
4. Not correct

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