Economics is a social science that studies the efficient allocation of scarce resources to attain the maximum fulfilment of unlimited human needs. Economics has two main branches: microeconomics (which deals with the economic behaviour of individual economic units and individual economic variables) and macroeconomics (which deals with the functions of the economy as a whole).

The central objective of economics is the efficient utilization of scarce resources to satisfy unlimited human needs. Economics uses two methods of logical reasoning: deductive reasoning (which involves reasoning from certain principles to the analysis of specific facts) and inductive reasoning (which involves reasoning from the particular to the general). Furthermore, economics uses two approaches: positive economics (which deals with knowledge and facts) and normative economics (which entails value judgments in applying the knowledge to solve problems).

An economy is divided into different parts, sometimes called decision-making units. The basic decision-making units of an economy are households (which are the chief owners of factors of production: land, labour, capital, and entrepreneurship), business firms (which hire the services of factors of production from households to produce commodities), and the government (which gets its income mainly from taxes levied on households and business firms in the form of direct and indirect taxes).