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Economics is defined as a social science that studies the production, distribution and consumption of goods and services. In simpler terms, economics is the study of how a society makes use of resources available to it as well as how an economy works. Economics focuses on the behaviour of people and the choices they make in order to most efficiently utilise limited resources. The word ‘economics’ comes from two Greek words - ‘oikos’ meaning house and ‘nomos’ meaning custom or law. Unlike physics or chemistry, economics is not a pure science, but a social science as it studies human interactions in an economic system.

According to Lionel Robbins, “economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.” Microeconomics studies basic elements in an economy, such as individual and market demand, the production of goods and services as well as the interactions among economic agents. Macroeconomics, on the other hand, studies the economy as a whole, as an interconnected system where behaviours like production, consumption, saving and investment interact as well as other factors like economic growth, international trade and government policy.