1. What is economics?

Economics is the study of how people choose to allocate scarce resources to satisfy their unlimited wants. Because resources are scarce and wants are unlimited, economics studies the best way to allocate resources so that none are wasted.

2. What is the economic way of thinking?

The economic way of thinking focuses on positive, as opposed to normative, analysis, and applies the five-step scientific method: (1) recognize the problem, (2) cut away unnecessary detail by making assumptions, (3) develop a model or story, (4) make predictions, and (5) test the model.