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Economics/Integral Calculus in Economics

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Question
Do Economists use Integral Calculus ? If so how ?

Answer
I thank you for selecting allexperts in general and me in particular, to answer your question.

NOTE : Economist = An optimum Decision Manager

Till 1940s, Economics was considered an abstract and descriptive subject. The world war 2 (1939-1945) brought the use of Mathematics for Management decision making process. The war strategies were used for peace-time gains. This was the origin of “Operations Research”.

In the field of Economic Science, use of mathematics is called “Econometrix”

In 1969, Quantitative synthesis of the national economy to isolate the important factors and their effects by means of a set of definitions and equations was introduced by the (First) Nobel Laureates in Economic Science, Jan Tinbergen (1903 - 1994. Netherlands School of Economics, Rotterdam, Netherlands) and Ragnar Frisch (1895 - 1973. Oslo University, Oslo, Norway). They developed and applied a dynamic model for the analysis of the economic processes, through the dimension of Econometrics.

The corporate goals are to optimise the Profits or reduce the costs and losses. This requirement is mathematically converted into an “Output requirement function”, input “Components function” and a controlling “Constraints function”.

If you take the case  of  finding the quantity of 5 products  to be produced to optimise the profit, it is called a “Product mix” problem. Each product may have different profit margins, demands and input material costs.

1) The required function is the  quantity of each product  to be produced to
  optimise  the profit (Optimisation).
2) The input function for each product is the
  (Cost of each raw material X Quantity) - Minmisation.
3) The constraining function is the quantity of market demand and
  production capacity available for each product (Limitations).

These functions could be expanded to include as many   input choices and all possible constraint  functions for a precise optimisation of the  output profit.

A mathematical solution, when interpreted properly, leads to the exact quantity of each product is to be manufactured.

Any productive decision by a government or private sector involves Economics. The   economic components are “demand, supply, consumption, break-even levels, costs, periods of time (queuing), probability of occurrence, etc…”

This needs the utility of Algebra  and  Integral Calculus. If the profit optimisation is extended over a period of time, it requires the cumulation in  all the 3 functions. Integration is a cumulation (adding) tool. Hence the Integral Calculus is used extensively in the Economic decision making. Please see the following for further applicability information.

A) “01. Central Role of Economics” at   http://www.drvsrs.com/smart.htm
B) Use of Algebra and Integral calculus in Economics at
  www.drvsrs.com/mgmtfull.htm
C) Use of Geometry  in Economics at www.drvsrs.com/sedfull.htm   
D) A comprehensive utility guide on Integral calculus  at
  www.albion.edu/econ/christiansen/micwcalc/screen1.pdf
E) Socio Economic Development Acceleration : Geometric Model
  ISBN : 978-3838357614. See at : www.drvsrs.com/store/page1.html#18
F) Productivity Redefinition – Algebraic Model
  ISBN : 978-3838364506.  . See at : www.drvsrs.com/store/page1.html#19

With Regards.
DRVSRS
Web : www.drvsrs.com
Book Store : http://drvsrs.com/page1.html  

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Basically a B.Sc (Physics) from the University of Madras, India. Started the career in production engineering under German and Italian experts. MBA in Management from IIM, Ahmedabad (India). Ph.D (Management) from the University of Bomaby (the first ever awarded in this subject). Headed the computer centres of Multi nationals; "Data Processing expert" of the Commonwealth, London (To implement World Bank and UNDP Computer softwares); "Consultant Adviser" to the Caribbean Development Bank (CDB), Barbados. Associated with Nobel Laureate in Economic Science-1979, Arthur Lewis (Past President of CDB) & 4 more on his introduction. Visiting professor to many universities. A Trained ISO 9001:2000 Quality Auditor. Over 40 years of combined experience in Accounts, Computer Software, Economics, Engineering, Management, Science, Technology, Research & Development and Qulaity systems. Author of over 60 Application Research papers. Currently a free-lance consultant in ISO Quality Systems, Socio-Economic development acceleration, Innovative software designs. Can answer any question in Theoritical/Applied-economics with an in-depth and innovative dimension. I DO NOT ANSWER : 1. STATISTICAL data & analysis. 2. PRIVATE questions, as they do not appear for PUBLIC view & search 3. Examination & Project report oriented questions. Website http://www.drvsrs.com

Experience

Experience in the area Over 40 years in Industrial, Service and Economic development sectors. Socio-economic development oriented expertise (1982-86). With Commonwealth Fund for Technical Cooperation, London as a "Data Processing Expert". With Caribbean Development Bank, Barbados (UNDP,World bank set up) as a "Cnsultant Adviser". See "http://www.drvsrs.com/drvsrs.htm" and "http://www.drvsrs.com/publication.htm". National & International awards. R & D Author at http://ideas.repec.org/e/psu50.html and http://www.ssrn.com/author=360079

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Intellectual Consultants. A proprietory Research and Development unit under the theme "Innovation. Information & New Concepts"

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See full details at http://www.drvsrs.com/drvsrs.htm (1) D.Litt in Computer Science - 1983. World University, USA. (2) Ph.D - 1975. First management doctorate awarded by the University of Bombay, India, after the inception of the subject. (3) MBA – 1966. IIM, Ahmedabad. India. First batch. 4) B.Sc - 1959. Physics. University of Madras, India

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Biography is listed in International Who is Who of Intellectuals (UK), Men of Achievement ( UK ), Men of Distinguished Contributions (USA). National and International awards and Citations.

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