The Analogy of Economics Principles and Physics Theory

Abstract

Physics and Economics were developed by using the scientific method approach. Economics, focus in discussing the use of limited resources by people efficiently and effectively. Physics focus in discussing the result of natural phenomena because of the interaction between energy and matter. This paper will be analyzed whether the principles in the economy has analogies with the theories and the laws in physics. In general there are tenth economics principles namely: the first principle "People face tradeoffs", the second principle "The cost of something is what you give up to get it", the third principle "Rational people think at the margin", the fourth principle "People respond to incentives", the fifth principle "Trade can the make everyone better off ", the sixth principle "Market are usually a good way to organize economics activity", the seventh principle "Governments can sometimes improve market outcomes", the eight principle "Country's standard of living depends on its ability to produce goods and services", the ninth principle " Prices rise when the government prints too much money", the tenth principle "Society faces a short-run trade-off between inflation and unemployment". Ten principles of economics turned out to have an analogy with the theory and the laws of physics, namely: the law of conservation of energy, the laws and theory of thermodynamics, opportunity theory, the theory of statistical physics, Newton's law, Ohm's law, equilibrium theory, the theory of atomic bonding, composite bonding theory and  law of Stefan Boltzmann and Wien.

Keywords: Econophysics, Economics principles, physics theory