Today’s the first day of class for the Summer I term at Auburn, so I get to introduce and define economics for a fresh crop of students.
Economics is the study of individuals making choices. Since humans are the focal point, economics fits in the social science category, along with psychology, political science, sociology, and other fields. Economics differs from the others by asserting the primacy of the individual and asking “what sort of things pertain to all choices by anybody, not just certain types of people in certain situations?” The short answer is scarcity. The fact that the things that make us happy and help us survive don’t exist in superabundance is why we have economics. Every choice ever made by anybody was caused by scarcity. No scarcity, no choices, no economics.
“Selecting something over something else” implies a means-end causal connection. Our ends are our desires, or our wants. Means are anything that help us satisfy our ends. We can also call means “goods”. So, we select something over something else in order to satisfy an end by using a good.
The means at your disposal and the ends they satisfy exist in an array, a list, or a ranking. Said another way, satisfaction or happiness in the economic sense is ordinal, not cardinal. Our preferences are also invisible to others and reside only in our own singular mind, so they are subjective, too. Preferences are ordinal and subjective.
Preferences give way to opportunities to exchange and therefore prices, production, the division of labor, and supply and demand, all of which make up the body of thought we know as economics.