Which of the following is a characteristic that an item must possess to be classified as a 'good' in economics?

• A. It must be produced by a government agency.
• B. It must be free of charge to all consumers.
• C. It must be scarce relative to demand.
• D. It must provide utility or satisfaction to consumers.

Answer: (D)

Verified step by step guidance

1. Understand the definition of a 'good' in economics: A good is an item that satisfies human wants and provides utility or satisfaction to consumers.
2. Recognize that scarcity is a fundamental concept in economics, meaning that resources or items are limited relative to the demand for them.
3. Identify that for something to be classified as a 'good', it must be scarce relative to demand; if it were abundant and free, it would not be considered an economic good.
4. Note that being produced by a government agency or being free of charge are not necessary conditions for an item to be classified as a good in economics.
5. Conclude that the two essential characteristics for an economic good are that it provides utility (satisfaction) and is scarce relative to demand.