ECON2015

Problem Set 2 (30%)

Open: March 28 – April 3 @ 11: 55 pm EC

This is an individual assignment, based on Units 4 - 8. Students must show ALL workings for
each question.

Question 1 (25 marks)
(a) You are told that the rank of matrix A is equal to 3.
(i) What do you understand by this statement?
(ii) Suggest a matrix whose largest possible rank is equal to matrix A. Explain your
answer.
(3 marks)
(b) The rank of the matrix A is 2.
2 4 2
𝐴 = #1 𝑘 3)
1 2 2

(i) Determine the value of the constant k. (3 marks)
(ii) For this value of k, is A invertible? Explain. (1 marks)

(c) Determine the definiteness of the quadratic form
𝑞+𝑥- = 𝑥!" + 2√6𝑥! 𝑥" + 2𝑥""
(4 marks)
(d) Consider the following system of linear equations

2𝑥! − 3𝑥" + 𝑥# − 3𝑥$ + 2𝑥% = 6
2𝑥! − 3𝑥" + 5𝑥# − 𝑥$ + 𝑥% = 8
4𝑥# + 3𝑥$ + 2𝑥% = 3
−2𝑥! + 3𝑥" + 3𝑥# + 3𝑥$ − 9𝑥% = −6

(i) Is the following system consistent? Provide a justification for your decision.
Ensure that you explain each step in the computation. (11 marks)
(ii) Can Cramer’s rule and the matrix inversion method be used to solve the system?
Justify your response. (3 marks)


Question 2 (25 marks)
(a) What is an orthogonal matrix? Determine whether or not the following matrix is
orthogonal. Justify your response. (4 marks)
−1 2 2
⎛√3 √10 √15⎞
⎜ −2 3 ⎟
𝑄=⎜ 0
√10 √15⎟
⎜ ⎟
√2 1 √2
⎝ √3 √5 √15⎠

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 (b) For the matrix
5 1 −2
𝐴 = # 3 −2 −1)
12 3 −5

(i) Determine the characteristic equation and the characteristic roots.
(ii) Determine the eigenvectors.
(iii) Diagonalize A.
Ensure that you explain each step in the computation. (20 marks)
(iv) Why is it useful to diagonalize a matrix? (1 mark)


Question 3 (50 marks)
(a) Consider an optimization problem
(i) How are the augmented matrices for a minimization and dual maximization
problem related? Explain. (3 marks)
(ii) What is the impact of changing the right-hand side coefficients on the optimal
solution? Explain. (3 marks)

(b) Consider the following initial simplex tableau
X1 X2 X3 S1 S2 S3 B Basic Variables
3 -1 8 1 0 0 48 S1
0 12 4 0 1 0 96 S2
-2 2 0 0 0 1 5 S3
-9 -5 -2 0 0 0 0

(i) List the objective function and constraints corresponding to the tableau.
(2 marks)
(ii) To find an improved solution using an iteration of the simplex method, which
entering and departing variables would you select? Explain. (3 marks)

(c) A company manufactures two products: X and Y. Product X costs $8 per unit and contains 2
units of raw material 1, 6 units of raw material 2 and 4 units of raw material 3. Product Y
costs $10 per unit and contains 2 units of raw material 1, 2 units of raw material 2 and 12
units of raw material 3. The company has 80 units of raw material 1, 120 units of raw
material 2 and 240 units of raw material 3 available. In addition, the product Y should be at
least 15 units less than product X. How many units of each product should the company
produce to minimize the cost of production?

(i) Derive the system of equations. (4 marks)
(ii) Use the extreme point method to solve the system. Ensure that you explain each
step in the computation. (7 marks)

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 (d) A company has three factories. Each factory produces three different products (A, B and C).
Factory 1 has a daily production capacity production of 8 units of A, 4 units of B and 8 units
of C. Factory 2 has a daily production capacity of 6 units of A, 6 units of B and 3 units of C.
Factory 3 has a production capacity of 12 units of A, 4 units of B and 8 units of C. The total
demand for product A is 300 units, for product B is 172 units and for product C is 250 units.
The daily operating cost for Factory 1 is $55 for Factory 2 is $60 and for Factory 3 is $50.
How many days should each factory be operated in order to fill the total demand and the
keep the operating cost at a minimum?
(i) Show a model that represents the company’s problem. (3 marks)
(ii) Write down the dual maximization problem. (2 marks)
(iii) Write down the initial simplex tableau. (2 marks)
(iv) Identify the entering, departing and pivot variables. (2 marks)
(v) Use the simplex method to determine the optimal tableau. Ensure that you explain
each step in the computation. (15 marks)
(vi) Identify the basic and non-basic variables. (2 marks)
(vii) Identify the optimal solution. (2 marks)





TOTAL MARKS = 100

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GRADING RUBRIC
Question Marks Assigned Total Marks
Q1A • 1 mark – Rank 3 Marks
• 2 marks - Explanation
Q1B • 2 marks – Workings 4 Marks
• 1 mark – Final answer
• 1 mark - Explanation
Q1C • 3 marks – Workings 4 marks
• 1 mark – Final answer
Q1D (i) System consistent? 14 Marks
• 3 marks - Explanation of each step
• 5 marks - Workings
• 1 mark - Whether consistent
• 2 marks - Justification
(ii) Can Cramer’s rule and the matrix inversion method be used?
• 1 mark - Yes/No
• 2 marks - Justification

Q2A • 1 mark – Definition 4 Marks
• 3 marks - Workings
Q2B • 4 marks - Explanation of each step 21 Marks
• 6 marks – Characteristic equation and roots
• 6 marks - Eigenvectors
• 4 marks - Diagonalize A
• 1 mark - Explanation

Q3A (i) How related 6 Marks
• 1 mark – how related
• 2 marks – Explanation
(ii) Impact change RHS
• 1 mark – Impact
• 2 marks - Explanation
Q3B (i) objective function and constraints 5 Marks
• 0.5 marks – objective
• 1.5 marks – constraints
(ii) improved solution
• 0.5 mark – Pivot row
• 1 mark – Explanation
• 0.5 marks – Pivot column
• 1 mark - Explanation
Q3C • 4 marks – System 11 Marks
• 5 marks – Solution
• 2 marks - Explanation of each step
Q3D • 3 marks – System 28 Marks
• 2 marks – Dual max
• 2 marks – Initial simplex
• 2 marks - improved solution
• 15 marks – Simplex solution
• 2 marks – Basic and Non-Basic
• 2 marks - Optimal solution

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 Criteria Excellent Good Satisfactory Poor
Q3c (ii) Rubric 5 marks 4 marks 2 - 3 marks 0 – 1 mark
Computation All calculations are Students Numerous errors Little or no
5 marks correct understands the when solving understanding of
procedure but a problem the problem is
few errors made in evidenced
computation
Explanation of 2 marks 1 mark 0.5 marks 0 mark
Steps All steps are Most of the steps Only a few of the Little or no
2 marks carefully and are correctly steps are correctly explanations of the
correctly explained explained steps are provided
explained. or explanations are
incorrect.

Criteria Excellent Good Satisfactory Poor
Q3d (v) rubric 10 marks 7 - 9 marks 4 - 6 marks 0 – 3 marks
Computation All calculations are Students Numerous errors Little or no
10 marks correct understands the when solving understanding of
procedure but a problem the problem is
few errors made in evidenced
computation
Explanation of 5 marks 4 marks 2 - 3 mark 0 - 1 mark
Steps All steps are Most of the steps Only a few of the Little or no
5 marks carefully and are correctly steps are correctly explanations of the
correctly explained explained steps are provided
explained. or explanations are
incorrect.