Final answer:
Economics is the study of decision-making under scarcity. It involves analyzing how individuals and societies allocate limited resources like labor, tools, land, and time. Economics uses scientific methods to understand and predict how these decisions affect the production of goods and services.
Step-by-step explanation:
Economics is a social science focused on the study of how humans make decisions in the presence of scarcity. It encompasses how individuals, families, businesses, and societies choose to allocate their limited resources. The central premise of economics is that resources such as labor, tools, land, and raw materials are not unlimited; therefore, we must make choices on how best to use them to satisfy our various needs and desires. The ultimate resource of time is also scarce - we all have only 24 hours in a day to earn an income, enjoy leisure, or rest. Given that resources are finite, economics seeks to analyze and explain the different ways these resources are organized and used to produce goods and services in society. As a scientific discipline, economics attempts to apply empirical and theoretical methods to study and predict decision-making processes and resource allocation.