02.11.

2022

MATHEMATICAL ECONOMICS I
MIDTERM EXAM FALL 2022-2023
QUESTIONS
1. Explain the following concepts
a) Comparative Statics, b) Endogeneous – Exogeneous Variable, c) Non-singularity of a
matrix, d) Linear Dependence, e) Conformability Condition (25 points)

2. Consider the following three matrices:

 1 0
1 3 2 1 
 , B=  0 3  , C=  2 1 0
A  
 4 0 1 0   4 2 
 
a. Arrange these three matrices so that they are conformable for multiplication. Explain your
answer briefly.
b. Show that the associative law of multiplication holds for this case. (20 points)

 2 2  2 0 1 0
3. Consider the three matrices A   , B   , and I   
1 5  3 2 0 1

a. Find a matrix C satisfying ( A  2I)C  I

b. Is there a matrix D satisfying (B  2I)D  I ? (20 points)

4. The supply and demand functions of a two-commodity market model are as follows:

Q1D  Q1S Q2D  Q2S

Q1D  18  3P1  P2 Q2D  12  P1  2 P2
Q1S  2  4 P1 Q2S  2  3P
Find the equilibrium prices and quantities simultaneously. (Use Cramer’s Rule) (20 points)

5. A residential construction company plans to build several houses of three different types: 5
of type A, 7 of type B, and 12 of type C. Write down a 3-dimensional vector x whose
coordinates give the number of houses of each type. Suppose that each house of type A
requires 20 units of timber, type B requires 18 units, and type C requires 25 units. Write
down a vector u that gives the different timber quantities required for one house of each of
the three different types A, B, and C. Find the total timber requirement by computing the
inner product u.x (15 points)

Time Allowed: 1 hour

Asst. Prof. Dr. Önder Yerlikaya