Economics is a social science that studies how societies allocate limited resources to fulfill their unlimited wants and needs. It examines the production, distribution, and consumption of goods and services. The field of economics is based on several key concepts and principles that help understand economic behavior and decision-making.

1. Scarcity: Scarcity is a fundamental concept in economics. It refers to the condition of having unlimited human wants and needs but limited resources to satisfy them. Because resources are scarce, individuals, businesses, and governments must make choices about how to allocate them efficiently.
2. Opportunity Cost: Opportunity cost is the value of the next best alternative forgone when making a choice. Whenever a decision is made, there are alternative options that must be given up. Understanding opportunity cost helps in evaluating trade-offs and making efficient decisions.
3. Supply and Demand: The law of supply and demand is a fundamental principle in economics. It states that the price of a good or service is determined by the interaction of its supply and demand. When demand exceeds supply, prices tend to rise, and when supply exceeds demand, prices tend to fall.
4. Marginal Analysis: Marginal analysis focuses on the incremental changes in costs and benefits associated with a decision. It involves comparing the additional benefits gained from consuming or producing one more unit of a good or service with the additional costs incurred.
5. Efficiency and Equity: Efficiency refers to the optimal allocation of resources to maximize societal welfare. It means producing goods and services at the lowest possible cost and distributing them to individuals who value them the most. Equity, on the other hand, refers to fairness or justice in the distribution of resources and wealth.
6. Economic Systems: Economic systems are the institutional frameworks and mechanisms through which societies organize production, distribution, and consumption. The three primary economic systems are market economies (where decisions are made by individuals and businesses through market forces), command economies (where decisions are made by a central authority), and mixed economies (which combine elements of both market and command systems).

The scope of economics extends beyond individual decision-making to analyzing the behavior of firms, industries, markets, and entire economies. It encompasses microeconomics (which focuses on individual economic agents) and macroeconomics (which studies aggregate phenomena such as national income, inflation, and unemployment). Furthermore, economics also explores various specialized branches such as international economics, labor economics, environmental economics, and development economics, among others.