 Solution

Number the fused heterocycle as a 2,3-dihydrobenzofuran: oxygen is position 1 and the acetamido substituent occupies aromatic position 6. Position 5 is the preferred site of electrophilic substitution. It is para to the ring oxygen and ortho to the acetamido group, so both groups stabilize its Wheland intermediate by resonance donation. Position 7 also receives donation, but lies between the two substituents and is more crowded. Position 4 lacks the same combination of directing effects.

The aryl oxygen donates a lone pair into the aromatic system. The acetamido nitrogen can also donate into the ring, although its lone pair is shared with its own carbonyl group, so it is less activating than a free amino group. Comparing resonance-stabilized intermediates and steric accessibility gives the position-5 prediction; simply counting heteroatoms does not.