Lesson: What Is Economics and Why It Is Important 



Economics is the study of how humans make decisions in the face of scarcity. Economics helps businesses, governments, and the members of a community make decisions based on the available resources. The study of economics might help you make better decisions about your future.

As you complete this lesson, consider the essential question. By the end of the lesson, you should be able to provide a detailed explanation to this question.

What is economics?

By the end of this lesson, you will be able to: 

  • discuss the importance of studying economics
  • explain the relationship between production and division of labor
  • evaluate the significance of scarcity

Download the Vocabulary Chart. As you complete each lesson, look for the key terms. Add each term to your Vocabulary Chart. You may use context clues or the Glossary to help you define each term. Then, write or draw an example to help you remember what each term means.

  • economics
  • scarcity
  • division of labor
  • specialization
  • economies of scale