The development of economic theories derived by mathematical exposition has been explosive in the past, but the interpretation of economic theories has remained extremely primitive for long time say for more than fifty years because, the assumption, which underlies the use of mathematics, has not been formerly scrutinized. Consequently, teachers of economic theories have misled their students in interpreting economic theories and business models. My concern in this paper is to put business education in the right perspective.

Thus, one of the purposes of this paper is to reintroduce a model[1], which I have developed previously, by which the validity of the interpretation of an economic theory, such as the marginal rate of substation in an indifference curve, can be tested. The major purpose of the paper is to apply the above model in interpreting the concept of economics, such as marginal rate of substitution, so that interpretation of an economic theory, thus teaching in business and economics can be put in right perspective.

[1] See Paul Kim, “A Fundamental of Scientific Inquiry in Economics,” http://scholarspace.jccc.edu/econpapers/6.



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