Question

Given the following Matrices:

Briefly discuss the importance of studying mathematical economics

Answer 1

The importance of studying mathematical economics :

• To thrive on the Cambridge Economics course, you need to enjoy (and be good at!) Mathematics at school and have an interest in applying mathematical and statistical tools to economic problems. Mathematics is the most important subject in preparation for studying Economics at Cambridge. The first year of the Economics course includes a compulsory course in Quantative Mathods that covers Maths and Statistics
• When you look at the subject requirements for the Economics course, you will notice that Mathematics is a required subject (you can't apply without it). Depending on what qualifications you are applying with, this may be A level Mathematics (there are multiple exam boards), IB Higher Level Mathematics, an Advanced Higher in Mathematics from the Scottish system, Pre-U Mathematics, Advanced Placement Calculus BC if you're taking US qualifications, or Mathematics up to your final year in one of the many other qualifications that we can admit you with. Do ensure that you learn the material thoroughly.
• If you have the opportunity to take Further Mathematics, that would be very helpful once you start the course, especially the Pure and Statistical options (rather than Mechanics or Decisions Maths).
• Analysis and study in economics help explain the interdependent relation between different variables. They try to explain what causes rise in prices or unemployment or inflation. Mathematical functions are modes through which these real life phenomena are made more understandable and logical.
• Indeed there has been long standing argument on how important is mathematical works relevant for economics and the uses of economics. It is interesting to know that a number of economists have been awarded the Nobel Prize for their application of mathematics to economics including the first one awarded in 1969 to Ragnar Frisch and JanTinbergen. Leonid Kantorovich won a Nobel prize in 1975 in economics and he was a mathematician!
• Many students who are looking to pursue a career in economics are advised to take a course in Mathematics since graduate level studies involve a lot more complex mathematics which is important to carry out research.
• You are obviously aware of the indispensable role of mathematics in economics. So your background in math would be a definite advantage to you if you do decide to study economics. In fact, with your math background, I think you could probably start your exploration of economics at the intermediate theory course level. You mention the possibility of taking classes at a community college. One problem, however, is that most community colleges offer only the entry-level principles courses in economics. I’ll have to leave it to you to decide whether it would be feasible to enroll, perhaps on a non-degree basis to start, in classes at a 4-year college or university.

Economics is a form of accounting in which all incomes are considered and balanced against all known expenses. Unlike accountancy, which looks at what has happened, economics tries to look ahead and predict what will happen in the next few years. Mathematics comes into it when constructing a formula that includes all the past costs and incomes and uses these numbers to plot a graph showing trends for the future. Unfortunately, economics cannot predict the future unless all the items in the formula are under control. This is never the case. Mathematics is used to baffle shareholders and the public by forming graphs with distorted values along the axes to make things either look good, or look bad.

So, if you have a good grasp of mathematics, you can spot the flaws in the suspect presentations, or you may be smart enough to baffle the audience with technical jargon.