Application of Mathematics in Economics

Abstract

Mathematics is adopted in economics to provide a precise, logical, and systematic framework for analyzing and solving problems related to resource allocation, production, consumption, and distribution. This article demonstrates how some economic principles are translated into mathematical form and solves various economic issues using basic mathematical methods. Mathematics is used to create economic models. The Cobb-Douglas production model, IS-LM model, supply and demand model, game theory, Solow growth model, and others are examples of concrete economic models. Mathematics serves as the backbone of modern economics, providing rigor and a structured approach to understanding complex systems. By leveraging mathematical tools and models, economists can analyze data, predict outcomes, and design policies to address real-world challenges.