what is the application of mathematics in economics?

Answer 1

Statistics.

Economics gathers statistics of social behavior to come to economic conclusions. For example ... In economics, a Consumer Price Index (CPI, also retail price index) is a STATISTICAL MEASURE of a weighted average of prices of a specified set of goods and services purchased by wage earners in urban areas. It is a price index which tracks the prices of a specified set of consumer goods and services, providing a measure of inflation. The CPI is a fixed quantity price index and a sort of cost-of-living index.

Answer 2

The application of mathematics in economics helps to to show the functional relations among various variables,for example if you want to show the income equation y=c+a where as y denotes income and c denotes consumption where as a stands for autonomous income,its through mathematics representation that this equation can be derived.

Answer 3

I have previously given many detailed economics answers, but I think your question is too too broad and needs a textbook just to summarize it. In brief, more than 80% of all economic issues can be represented, summarized, or solved mathematically.

Answer 4

There are many applications of Math in Economics!
Let's say the first order derivatives!
Say you have a function of the Total Costs. (TC)
If you would take the first order derivative of the TC you would get the MC (marginal cost) (the cost if you produce one additional unit).
Equal MC to MR (marginal revenue) and BANG! ... you maximize your profit!

Answer 5

Well, the whole area economics is one big application of mathematics. You solve optimization problems, do linear regressions, estimate ARMA and ARIMA models...

Answer 6

Someone's got to be able to count the money.

But seriously, marginal cost is a key concept in economics.
It's how much the next item will cost.

Mathematically, the marginal cost is the first derivative of total cost. (How much does the total cost change when one more item is purchased)