Importance and Use of Mathematics in Economics

Use of Mathematics in Economics

Mathematics gives concrete form to economic laws and relationships and makes them more precise and practical. The use of mathematics in economics converts the verbal form of economic theory into mathematical language. Mathematics is a powerful shorthand of logic which is especially suitable for developing theories and models in economics. Mathematical symbols can be used instead of terms, and equations instead of sentences. The use of mathematics in economics can be explained as follows.

1. To show the cause and effect relationship between variables: Economics is a positive science. By utilizing mathematical tools, we can show the cause and effect relationship between different economic variables. For example, the quantity supplied of a commodity depends upon its price. So, we can write the quantity supplied of a commodity as a dependent variable (effect) and its price as an independent variable (cause). Here we can show this relationship by using mathematical equations.