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International Journal of Commerce and Management Research

ISSN: 2455 - 1627, Impact Factor: RJIF 5.22

www.managejournal.com

Volume 3; Issue 7; July 2017 ; Page No. 51-55

Application of mathematics in Economics: A study with different perspectives

Rituaparna Chaudhary

Assitant Professor, Thakur College of Science and Commerce, Kandivali (East), Mumbai, India

Abstract

Every academic subjects have its own standards by which it judges the merits of what researchers claim to be true. In the study of

Physical Sciences it typically requires experimental verification. Whereas in the study of History it requires links to the o riginal

sources related to the past. In Economics there are two purposes to apply mathematics, one is the mathematical tools needed to

make and understand economic arguments, the second one is, to make you comfortable talking about economics using the shorthand

of mathematics. The major development of the second quarter of 20th century in the field of economics was the mathematization

of economics. The application of mathematical techniques to the analysis of economic problems is a methodological possibility.

This technique often called as Mathematical economics. This Mathematical economics is the application of mathematical

methods to represent theories and analyze problems in economics .

During the last six decades, this methodological option has been linked to history of a significant part of economic analysis.

Mathematics allows economists to form meaningful, testable propositions about wide-ranging and complex subjects which could

less easily be expressed informally.

The purpose of this course is to provide a comprehensive exposition of basic mathematical instruments that are commonly used in

all fields in economics - microeconomics, macroeconomics, econometrics, international trade and finance, public finance, money

and banking. The methodology of the study is based on secondary data. The uses of Differential calculus, Maxima and Minima etc.,

in economics are attempted to study in this article. The major finding of the study is mathematics played a pivotal role in economic

theory and research.

Keywords: mathematical, wide-ranging

Introduction

Economics is a social science. It does not just describe what

goes on in the economy. It attempts to explain how the

economy operates and to make predictions about what may

happen to specified economic variables if certain changes take

place, e.g. what effect a crop failure will have on crop prices,

what effect a given increase in sales tax will have on the price

of finished goods, what will happen to unemployment if

government expenditure is increased. It also suggests some

guidelines that firms, governments or other economic agents

might follow if they wished to allocate resources efficiently.

Mathematics is fundamental to any serious application of

economics to these areas. Applications of Mathematics in

Economics presents an overview of the (qualitative and

graphical) methods and perspectives of economists. It provides

concrete form to economic laws and relationships and made

more practical. Use of Mathematics helps in systematic

understanding of the relationship and in derivation of certain

results which would either be impossible through verbal

argument, or would involve complex, tedious and difficult

processes. Mathematics now a day a very important tool used

in economic analysis. Use of mathematics gives a better

understanding about different economic conditions. Out of vast

applications of mathematics in economics, in this study we will

try to find out the different possibilities of applications. We

will check the relation between both subjects. Though they are

completely different subjects but after this study we will able

to understand how they are inter related with each other.

Objectives of the Study

1. To study the application of Mathematics in Economic

theory concepts.

2. To observe the different use of Mathematical tools in the

research of economics.

Methodology

The study is based on secondary data. The author refers the

research reports, articles, Books, Journals and Websites. The

use of Mathematical techniques and tools in economic

theoretical concepts are explained through illustrations

Some Application of Mathematics in Economics:

1. Functions

A mathematical function describes the relation between two or

more than two variables. That is, a function expresses

dependence of one variable on one or more other variables.

Thus, if the value of a variable y depends on another variable

x, mathematically we may write:

y=f (x)

The above expression implies that every value of the variable

y is determined by a unique value of the variable x. In the

function (1) y is known as the dependent variable and x is the

independent variable.

In economics Demand is a function of price and production is

a function of factors of production. In usual language we say

that demand (D) depends on the price, in mathematical terms