Microeconomics can be math-intensive. Fundamental microeconomic assumptions about scarcity, human choice, rationality, ordinal preferences, or exchange do not require advanced mathematical skills. However, many academic courses in microeconomics use mathematics to inform about social behavior quantitatively.
Key Takeaways
- Mathematical techniques in microeconomics courses include geometry, order of operations, balancing equations, and derivatives.
- Economics is not readily verifiable or falsifiable by empirical quantitative analysis.
- Using math skills, economists may research economic issues related to international trade or interpret and forecast trends in financial markets.
Logical Deduction in Economics
Economics is not readily verifiable or falsifiable by empirical quantitative analysis but flows from logical proofs. Economics assumes that people are purposeful actors and must interact with scarce resources to achieve conscious ends.
These principles are immutable and not testable, as are the deductions which flow from them. Like the Pythagorean theorem, each step of the proof is true as long as the prior steps do not contain any logical error.
Microeconomics courses may include geometry, order of operations, balancing equations, and using derivatives for comparative statistics.
How Economists Use Math
Microeconomics might use mathematics to highlight existing phenomena or draw graphs that visually represent human action. Microeconomics students should familiarize themselves with optimization techniques using derivatives and understand how slope and fractional exponents interact within linear and exponential equations.
To pursue a career as an economist, individuals may need to have completed undergraduate coursework in subjects such as economics or mathematics. In 2022, the median income for an economist was $113,940. Using math skills, economists may research economic issues related to the labor force or international trade, interpret and forecast trends in financial markets, and present research in tables and graphs.
Economics is not math, but math is a tool for presenting, manipulating, and using economic models.
Examples of Math in Microeconomics
Students should be able to derive the value of the slope of a line using the linear equation "y = a + bx" and solving for b. Supply and demand curves intersect to show equilibrium. Economists use endogenous variables to summarize the forces that impact supply and demand themselves.
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Also called a market-clearing price, the equilibrium price is the price at which demand matches supply, producing a market equilibrium acceptable to buyers and sellers. Where an upward-sloping supply curve and a downward-sloping demand curve intersect, supply and demand in terms of the quantity of the goods are balanced, leaving no surplus supply or unmet demand.
What Are Examples of Undergraduate Math Classes in Microeconomics?
Advanced Calculus and Linear Algebra are classes that undergraduate studies take when studying microeconomics.
How Do Economists Analyze Data?
Economists often use statistical analysis and software or mathematics, including calculus and linear algebra, to develop models to analyze data.
Do Universities Require Math Classes When Studying Economics?
A combination of math and economics provides a background in economic theory plus the mathematical tools needed to analyze and develop theoretical constructions.
The Bottom Line
Economists use math to research or interpret market trends. Students who study microeconomics will need linear algebra, calculus, and geometry. Microeconomics uses mathematics to highlight phenomena or draw graphs to represent human actions.
