Economics is the social science that studies the production, distribution, and consumption of goods and services.

The term economics comes from the Ancient Greek (lang: oikonomia, "management of a household, administration") from (lang: oikos, "house") + (lang: nomos, "custom" or "law"), hence "rules of the house(hold)".

Current economic models developed out of the broader field of political economy in the late 19^th century, owing to a desire to use an empirical approach more akin to the physical sciences.Clark, B. (1998). Political-economy: A comparative approach. Westport, CT: Preager. A definition that captures much of modern economics is that of Lionel Robbins in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.

Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business and finance but also in crime, education, the family, health, law, politics, religion, social institutions, and war. This dominating effect of economics on the social sciences has been described as economic imperialism.

Microeconomics

main: Microeconomics A common distinction is between positive economics (describing "what is") and normative economics (advocating "what ought to be") or mainstream economics (more "orthodox") and heterodox economics (more "radical"). The primary textbook distinction is between microeconomics ("small" economics), which examines the economic behavior of agents (including individuals and firms) and "macroeconomics" ("big" economics), addressing issues of unemployment, inflation, monetary and fiscal policy. Microeconomics looks at interactions through individual markets, given scarcity and government regulation. A given market might be for a product, say fresh corn, or the services of a factor of production, say bricklaying. The theory considers aggregates of quantity demanded by buyers and quantity supplied by sellers at each possible price per unit. It weaves these together to describe how the market may reach equilibrium as to price and quantity or respond to market changes over time. This is broadly termed demand-and-supply analysis. Market structures, such as perfect competition and monopoly, are examined as to implications for behavior and economic efficiency. Analysis of change in a single market often proceeds from the simplifying assumption that behavioral relations in other markets remain unchanged, that is, partial-equilibrium analysis. General-equilibrium theory allows for changes in different markets and aggregates across all markets, including their movements and interactions toward equilibrium.