How Maths is Used in Economics
If you are wondering whether you will meet maths again in economics, the answer is yes. A definition of economics says that it is the study of how humans make decisions in the face of scarcity.
The process of studying this requires a certain level of precision that only maths can guarantee. This is why maths is regarded as the language of economics.
Though economics is a social science, it uses maths to prove its theories and concepts. The reason for this is not far fetched as it is almost impossible to make imprecise models using mathematics.
Areas Where Maths is used in Economics
So here are some very important ways in which maths is used in economics.
1. Computing Growth Rate
One of the concepts you will come across in economics is the growth rate. It simply means the percentage change of a specific variable within a particular time.
Whether it is the nation’s GDP or your income, to get an accurate percentage change, you have to divide the change in quantity with the total quantity. Computing the growth rate of a variable requires precision.
This is where mathematics is needed and used because maths tend to provide a certain amount of preciseness to outcomes.
2. Clarity of Argument
The subject of economics is filled with theories. Just like hypothesis, theories can be proven or rejected. And to arrive at a theory, such a hypothesis needs to be proved.
As a result, economists, therefore, use the instrumentality of mathematics to prove the authenticity of their claim and express their thoughts precisely. This is because mathematics help them to explicitly explain their assumptions and prove their results.
Another concept you will be sure to come across in economics is the concept of econometrics. It is simply a quantitative application of mathematical or statistical models to economic data to give empirical content to economic relationships.
Econometrics rely greatly on statistical approach which is a form of mathematics to figure out explanations as well as to forecast the future. They do this by conducting statistical inferences, measurements or observations.
Without maths, this aspect of economics will be an impossible feat.
Two Other Areas
4. Microeconomics Theories
Microeconomics is that part of economics that studies the behaviour of individuals and firms with regards to making decisions within the economy.
Although human behaviour cannot be predicted using mathematical formulas, microeconomics use mathematics to show the predictable outcomes of certain human decisions or actions. They use the instrumentality of graphs and some mathematical techniques such as comparative statistics, geometry, equation balancing, etc.
5. Quantitative Predictions
Quantitative predictions are predictions that are extensively based on data which can be measured or calculated.
Economists use this approach to provide theories and explanations about why things happen the way they do in the economic market.
This is also where maths is used in economics. Using models, graphs or tables, these predictions are analysed to arrive at a conclusion. The precision of maths comes in handy by helping economic researchers to draw inferences that are as close to reality as possible.
With this, you can see that not only is maths used in typical science subjects like engineering or physics, it also has an important role in economics. So if you are looking to have a degree in economics, one of the wisest decisions to make is to embrace your mathematics now with the help of an online maths tutor. Of course if you need help with your revision then you can also consider attending one of our A Level Economics revision courses which take place during half term holidays.
Of course, if you are looking for some help then our maths revision courses, will give you an insight into how to answer some of the harder questions and help you prepare for the upcoming exams
Should you require support throughout the year then you can use a online A Level Maths Tutor or indeed a online maths tutor for GCSE. Also, our classroom based courses cater for a small group of students at any one time and are highly bespoke catering towards student needs.
Our all exam board courses for A Level Maths take place in a variety of locations including Manchester, Lymm, London, York and due to the current situation we are also offer GCSE maths revision courses online too.
Our courses take place during half term holidays and we are currently taking bookings for all our courses. With exams in England taking place in 2021 we expect our next February 2021 GCSE & A Level Maths Revision Courses as well as our GCSE & A Level Maths Easter revision courses to be both very busy in 2021. With the current situation with Covid-19 this course will of course be online. The course will be packed full of information to help students prepare for their exams in summer 2021. It is hoped that we can offer our traditional group based maths revision courses as soon as possible.