What Math Skills Do I Need to Study Microeconomics?

Microeconomics can be, but is not necessarily, math-intensive. Fundamental microeconomic assumptions about scarcity, human choice, rationality, ordinal preferences or exchange do not require any advanced mathematical skills. On the other hand, many academic courses in microeconomics use mathematics to inform about social behavior in a quantitative way. Common mathematical techniques in microeconomics courses include geometry, order of operations, balancing equations and using derivatives for comparative statistics.

Logical Deduction in Economics

Economics, like many aspects of geometry, is not readily verifiable or falsifiable by use of empirical quantitative analysis. Rather, it flows from logical proofs. For example, economics assumes that people are purposeful actors (meaning that actions are not random or accidental) and that they must interact with scarce resources in order 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 necessarily true as long as the prior steps did not contain any logical error.

Mathematics in Microeconomics

Human action does not adhere to constant mathematical formulas. Microeconomics might appropriately use mathematics to highlight existing phenomena or draw graphs to visually show the implications of human action.

Students of microeconomics should familiarize themselves with optimization techniques using derivatives. They should understand how slope and fractional exponents interact within linear and exponential equations. For example, 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. In specific markets, these variables can be isolated to show how supply or demand directly relate to price or quantity. These equations become increasingly dynamic and complicated in advanced microeconomics.

It is a common fallacy to interpret mathematical causality with real economic causality. Price does not cause supply or demand any more than slope causes profits. Rather, human action drives all of these variables simultaneously in a way that mathematics cannot completely capture.

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