Written by the Fiveable Content Team • Last updated September 2025
Verified for the 2026 exam
Verified for the 2026 exam•Written by the Fiveable Content Team • Last updated September 2025
Definition
Economics is the social science that deals with the production, distribution, and consumption of goods and services. It examines how individuals, businesses, and governments make choices to allocate resources.
Related terms
Supply and Demand: The relationship between the quantity of a product or service available in the market (supply) and the desire for it by buyers (demand).
Opportunity Cost: The value of what is given up when making a choice. For example, if you choose to go to a party instead of studying for an exam, the opportunity cost is potentially getting a lower grade.
Utility: The satisfaction or usefulness that someone derives from consuming a good or service. It helps economists understand why people prefer certain choices over others.