YORK UNIVERSITY ECON1540.03: Introductory Mathematics for Economists II V.

Bardis

Practice Assignment 2 (Please Do Not Submit.) 1. Find the determinant of each of the following matrices

2 4 6 A = 1 2b 2a 3 1 1

0 2 0 B= 2 2 3

1 0 0 0 0 0 5 1 4 a

C=

a 0 0 d 0

b c a a 0

b d a d c

0 0 b 0 0

a 0 c c 0

In each case, under which condition(s) does the inverse of the matrix exist? 2. Consider the system 3x1 x2 = 3 2x3 x1 + 3x3 = 2 2x2 = 4x1 11 (a) Express the system in matrix form. (b) Solve the system using Cramers Rule. (c) Solve the system using matrix inversion. 3. Consider the simple macro model described by the three equations:

= C + A0

C = a + b(Y T ) T = d + tY where Y is national income, C is consumption, T is tax revenue, A0 is the constant (exogenous) autonomous expenditure, a, b, d and t are all positive parameters and a bd > 0. (a) Express the model in matrix form. (b) Find the solution using Cramers rule. (c) Given the above, show that the conditions 0 < b < 1 and 0 < t < 1 (together) guarantee that the solution is unique and meaningful in the context of the model. 4. Prove each of the following statements: (a) Let A be a 2x2 matrix. If As columns are linearly dependent, then |A| = 0. (b) If A is invertible and symmetric, then A1 is symmetric. (c) The matrix P = I X (X X )1 X is idempotent. (d) Let A be any 3x3 matrix. Then a11 C31 + a12 C32 + a13 C33 = 0, where Cij denotes the (i, j )-th cofactor of A. 1

1 2 2 5. Consider the matrix A = 1 0 3 . 2 1 5 (a) Find the determinant of A using an expansion by cofactors. (b) Find the inverse of A. (c) Find the determinant of (A )1 .

6. The (i, j ) element of the matrix A below represents the portion of wealth invested in asset i by fund j . 1 1 0 2 1 2 0 A= 1 2 2 1 0 2 1 2 As indicated by the matrix there are three assets(the rows) and three funds (the columns). An investor who invests xj portion of her wealth to be invested in fund j , j = 1, 2, 3, in eect invests bi portion of her wealth in asset i, i = 1, 2, 3, such that

1 2 1 2

0
1 2 1 2

x1 b1 0 x 2 = b2 1 x b 3 3 2

1 2

(a) Find how the investor should invest her money in funds is she wants to hold a portfolio with 1/4 of her wealth in asset 1, 1/4 of her wealth in asset 2, and 1/2 of her wealth in asset 3. (b) Find how the investor should invest her money in funds is she wants to hold a portfolio with 9/10 of her wealth in asset 1, 1/10 of her wealth in asset 2, and 0 of her wealth in asset 3. (c) Find how the investor should invest her money in funds is she wants to hold a portfolio with the same portion of wealth in each of the three assets. 7. Consider the 2x2 matrix A, where each of its elements is a continuous and dierentiable function of the variable x, that is, A= a(x) b(x) y (x) z (x)

Denote the respective derivatives by a (x), b (x), y (x) and z (x). (a) Find the determinant of A. (b) Find the derivative of the determinant of A with respect to x. (c) Show that d|A| a (x) b (x) a(x) b(x) = + y ( x ) z ( x ) y (x) z (x) dx (d) Using the result in part (c), nd the derivative of each of the following determinants: |B | = x2 + x 1 , 2 5 |C | = x3 2 , 2 x+2 |D| = ln(x) ex 5 2x
2