Software Engineering Economics is an invaluable guide to determining software costs, applying the fundamental concepts of microeconomics to software … - Barry Boehm

Most post-mortems of these software disaster projects have indicated that their problems would have been avoided or strongly reduced if there had been an explicit early concern with identifying and resolving their high-risk elements. Frequently, these projects were swept along by a tide of optimistic enthusiasm during their early phases, which caused them to miss some clear signals of high risk issues which proved to be the project's downfall later.
Enthusiasm for new software capabilities is a good thing. But it needs to be tempered with a concern for early identification and resolution of a project's high-risk elements, so that people can get these resolved early and then focus their enthusiasm and energy on the positive aspects of their software product.

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.

Poor management can increase software costs more rapidly than any other factor. Particularly on large projects, each of the following mismanagement actions has often been responsible for doubling software development costs.