On the foundations of mathematical modeling of economy (Q1598231)

Summary: The main issue of my report is economic sense of conditions of integrability of consumers demand function. Generally speaking, these are the conditions of existence of consumption and price indices for separated groups of goods. In formal sense, integrability conditions are an analog of the second law of thermodynamics but they are not always fulfilled. On the other hand, it is shown that if the consumer demand functions satisfy the integrability conditions, then the Leontieff description of multi-product producing system regulated by equilibrium market mechanisms can be aggregated by means of the consumption index (utility function) into a production function. The latter describes the way the production index depends on the primary resources used by the producing system.