Goods that are useful, scarce and can command price are called …………. goods.

1. Analyze the question The question asks for the term used for goods that have three features: they are useful (they give satisfaction), they are scarce (limited in supply), and they command a price (people must pay for them).

2. Explain the concept In Economics, goods are classified in several ways:

• Free goods are available in unlimited quantity and have no price. Examples are air and sunlight.
• Economic goods are useful, scarce relative to demand, and have a price. They require effort or money to obtain. Examples are rice, cars, and books.
• Capital goods are used to produce other goods, such as machines and tools.
• Consumer goods are bought for direct satisfaction, such as food and clothes.

3. Step-by-step solution

• Useful: the good satisfies a want.
• Scarce: the supply is limited compared with the demand.
• Commands a price: buyers must pay to get it.

A good with all three characteristics is an economic good.

Checking the other options:

• A. Capital: this describes the use of the good, not its scarcity or price.
• B. Consumer: this describes who uses it, not its scarcity or price.
• D. Free: free goods have no price and are not scarce, so they are the opposite of the description.
• E. Scarce: scarcity is only one of the features, and "scarce goods" is not the standard classification for goods with a price.

4. Answer The correct option is C. economic.

5. Exam tip Remember that economic goods = useful + scarce + priced, while free goods = useful but not scarce and no price. When a question lists these features together, think "economic goods."