Economics studies human behavior by examining how people make decisions in situations of scarcity, where they must choose between competing alternatives. It uses models and theories to explain and predict behavior, and it tests those models using data from real-world markets and experiments. Economics assumes that people are rational, self-interested, and responsive to incentives. It also considers the social and cultural factors that influence economic behavior, such as social norms, beliefs, and institutions. By understanding how people behave, economics can help policymakers design more effective policies and programs.