"The dictionary defines "economics" as "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services." Here is another definition of economics which I think is more helpful in explaining how economics relates to software engineering."

“The spiral model presented in this article is one candidate for improving the software process model situation. The major distinguishing feature of the spiral model is that it creates a risk-driven approach to the software process rather than a primarily document-driven or code-driven process. It incorporates many of the strengths of other models and resolves many of their difficulties.”

“Throughout the software life cycle, there are many decision situations involving limited resources in which software engineering economics techniques provide useful assistance.”

“Software Engineering Economics is an invaluable guide to determining software costs, applying the fundamental concepts of microeconomics to software engineering, and utilizing economic analysis in software engineering decision making.”

“If a project has not achieved a system architecture, including its rationale, the project should not proceed to full-scale system development. Specifying the architecture as a deliverable enables its use throughout the development and maintenance process.”

“The stagewise and waterfall models. As early as 1956, experience on large software systems such as the Semi-Automated Ground Environment had led to the recognition of these problems and to the development of a stagewise model to address them.”

“If we look at the discipline of software engineering, we see that the microeconomics branch of economics deals more with the types of decisions we need to make as software engineers or managers.”