It's easy actually. The wider your wheels the more surface area the more grip you have. The bigger the wheels, the lesser the rotational speed but the more power the wheels can handle.
Fuel economy isn't affected much. When the wheels can't handle the power set down by the wheels you get slip. When you get slip the power produced by the engine goes to waist and then the fuel goes to waste. The bigger your wheels the greater the weight and the greater the drag caused by the wheels. So if you wheels get bigger fuel economy is affected aswell.
If you really want to know more about the subject, lookup "centrifugal forces" or "rotational forces".
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