Mathematics (tutorials)

III. Matrices

1 Matrix equations
1. Given
" matrix
# equation.
" Solve
# it using the inverse matrix method.
1 2 0 1
a) ·X =
1 1 2 1
   
1 2 1 1 2 1
b) Y ·  1 0 2  =  1 1 0 
   

0 1 0 0 0 1
" # !T " #2 " #
6 7 6 7 6 −5
c) ·X −I + =
−5 −6 −5 −6 7 −6
" # " #2 T " #
8 9 8 9 8 −7
d) X ·  − + I =
−7 −8 −7 −8 9 −8
   
−2 −2 2 −1 0 " #
h iT 2
e)  1

2 −1  · X + −1 0 −2

= 0 2 ·
 
−1
2 −1 3 −2 1
 
#2 T 3 −1
 " # " # " #!−1 " " #
4 3 −2 1 −2 1 −3 4 3 1 2 
f) X · · · − 3I + = · 1 2 
 
−1 −1 −1 3 −1 3 −2 3 −1 2 1
2 1
 
−1 2
" # " # " #T  " #T " #
2 −1 0 2 −1 −1 2 0 −1
g) 3 · · 1 0 = · − 2I  · X · +4·
 
−1 0 2 1 3 3 0 −1 2
1 0
T 
" # −1 3 " #!T " #
−1 4 T −2 1 −1 2 3
h) ·X + 5 0  = X · −
 
1 −2 4 0 2 −5 1
−2 −1
 " #T T " # " #T " #2
1 1 −1 2 −2 −4 −1 0 T 0 3
i) X · − I + · =X −
−2 −4 0 −1 3 0 −1 2 −2 −1
    T
" # " # −1 2 " #2 −3 1
2 −3 −2 −1 0 2 −1 2
j) − ·  −2 1  · X T = X · −  1 −1 
    
−2 −1 −2 −2 3 −1 −2 1
−1 2 4 2
" # " #T " #
2 2 −4 1
k) X T · · − = 5X T + 5I
1 −1 −1 −3
   
−1 1 5 2 1 −1
l)  0 −3 2  · X −  3 2 5  = −2X
   

1 2 0 −1 0 −1
2 Application in economics: Input-output model
Notation and meaning
ˆ Each economy consists of branches (industries) linked each with the other. Consider economy
with n branches.

ˆ Yi – the total production of i-th industry or the gross value of outputs (in physical or monetary
units);

ˆ yij – flow from i-th industry to j-th industry (intersector flow);

ˆ yi – the final production (output) of i-th industry (the part of total production which has not
been consumed/sold in all industries)
Formalization of the input-output model
Equilibrium condition:
n
X
yij + yi = Yi , i = 1, . . . , n,
j=1

or equivalently, as the system of linear equations:




 y11 + y12 + · · · + y1n + y1 = Y1

21 + y22 + · · · + y2n + y2
y

= Y2




........................ ......
yn1 + yn2 + · · · + ynn + yn


= Yn
Input-output table / flow table (n = 3)

yij
yi Yi
i/j 1 2 3
1 y11 y12 y13 y1 Y1
2 y21 y22 y23 y2 Y2
3 y31 y32 y33 y3 Y3

2. Fill in the lacking coefficients in the flow tables:

a)

yji
yj Yj
j/i 1 2 3
1 10 15 40 5 ...
2 18 14 20 7 ...
3 10 5 30 8 ...

b)

yji
yj Yj
j/i 1 2 3
1 50 10 30 ... 120
2 20 20 10 ... 50
3 10 20 70 ... 125

c)
 yji
yj Yj
j/i 1 2 3 4
1 10 ... 30 50 40 170
2 30 20 5 10 ... 80
3 40 10 ... 15 35 100
4 30 50 100 40 20 ...

Leontieff model

ˆ Cost coefficients
Assumption: Total production is proportional to inputs and this proportion is constant in time.

ˆ Interpretation of aij :
- fixed cost (coefficient of production),
- aij is price of the product from i-th branch necessary to produce one unit of the product in
j-th branch.

ˆ Definition of cost coefficients

yij = aij · Yj ⇐⇒ aij = yij /Yj (0 ¬ aij ¬ 1)

ˆ technology matrix (matrix of cost coefficients): A = [aij ]n×n

ˆ matrix form of the model:



 y1 = Y1 − (y11 + y12 + . . . + y1n )
y2 = Y2 − (y21 + y22 + . . . + y2n )



..




.
yn = Yn − (yn1 + yn2 + . . . + ynn )


Leontieff’s assumption:
yij = aij · Yj



 y1 = Y1 − (a11 Y1 + a12 Y2 + . . . + a1n Yn )
y2 = Y2 − (a21 Y1 + a22 Y2 + . . . + a2n Yn )



..




.
yn = Yn − (an1 Y1 + an2 Y2 + . . . + ann Yn )


In matrix form:
       
y1 Y1 a11 a12 . . . a1n Y1

 y2 


 Y2  
  a21 a22 . . . a2n   Y2 
 

−
.. = .. .. .. ..  ·  .. 
.. 
    

 .



 .
 
  . . . .   . 
yn Yn an1 an2 . . . ann Yn

y = Y − A · Y ⇐⇒ y = (I − A) · Y ⇐⇒ y = L · Y
 " #
80 40
3. Consider two-sector economy. The flow matrix [yij ] = and total production vector
60 20
" #
200
Y= are given. Find:
100
a) final production vector,
b) technology matrix, " #
300
c) vector of final production if the total production is Y = ,
200
" #
180
d) vector of total production if the final production is changed to y = .
72
" #
80
e) What will be the change in the final product if the total production change is ∆Y = ?
−20