What is the definition of economics?

The definition of economics centers on how individuals and societies allocate scarce resources to satisfy their needs and desires. This encompasses a broad range of topics, including production, distribution, and consumption of goods and services. Scarcity is a fundamental concept in economics, as it highlights the limitations of resources available to achieve various goals. Economics examines decision-making processes in the context of limited resources, weighing trade-offs, and the implications of those decisions on overall welfare.

By focusing on allocation, this definition integrates both macroeconomic and microeconomic perspectives, considering not just individual decisions but also the collective behaviors of societies. It emphasizes the importance of choices and resource management, which is particularly relevant in the face of competing wants and limited means. Hence, this definition captures the essence of what economics is truly about.