Mathematics II

Bachelor in Economics
Bachelor in Business Administration

Problem Set 2: Linear Algebra (II)

Solutions

Departament d’Economia i d’Història Econòmica

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1. Show that the following sets are open, closed, bounded and/or
compact:
(a) The interval [0, 1] ⊂ R.

Set is closed since it contains its boundary points (∂A ⊂

A). Also, its complement Ac is open. It is bounded since
the ball B(0, 2) which is the open interval (−2, 2) con-
tains, [0, 1] ⊂ (−2, 2) . Hence the set is compact.
(b) The coordinate axes R2 .

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 The set is closed and unbounded. All points in the set are
boundary points, and the set contains all of its boundary
points.
(c) A = {(x, y) ∈ R2 | x + y ≤ 1}.

Closed but not bounded

(d) A = {(x, y) ∈ R2 | x − y ≤ 0} ∪ {(x, y) ∈ R2 | x ≤ 0}.

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 Closed but not bounded
(e) A = {(x, y) ∈ R2 | 0 < x2 + y 2 ≤ 1}.

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 Neither open nor closed, but bounded (the origin (0) is a
boundary point which is not included, but there are other
boundary points which are included).
(f) A = {(0, 1) ∈ R2 }.

Compact. The set is a singleton (set with one element)

(0, 1), ∂A ⊆ A it is clearly closed and bounded.
(g) A = {(x, y) ∈ R2 | y ≤ x + 1 , x ≤ 1, y ≥ −x − 1}.

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 It is a closed and bounded set, thus, compact.
(h) A = {(x, y) ∈ R2 | − 1 ≤ y ≤ 1 , −1 ≤ x ≤ 1}.
V
In Geogebra, paste this a:-1≤y≤1 -1≤x≤1

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 It is a closed and bounded set, thus, compact.
(i) A = {(x, y) ∈ R2 | x2 + y 2 = 4}.

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 It is a closed and bounded set, thus, compact.
(j) A = {(x, y) ∈ R2 | x2 + y 2 > 1}.

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 Open set, unbounded.
(k) A = {(x, y) ∈ R2 | 1 < x2 + y 2 < 9}.

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 Open set, bounded.
(l) A = {(x, y) ∈ R2 | y ≤ 2, y − x2 ≥ 0}.

It is a closed and bounded set, thus, compact.

(m) A = {(x, y) ∈ R2 | y − x3 > 0, x < 1, y < 1}.

Open, unbounded.
(n) A = {(x, y) ∈ R2 | y − ex ≥ 0, x ≥ 0, y + x2 − 2 ≤ 0}.

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 It is a closed and bounded set, thus, compact.
(o) A = {(x, y) ∈ R2 | x ≤ 2, y + 2 − x ≥ 0, y − ln x ≤ 0}.

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 It is a closed and bounded set, thus, compact.

2. Determine whether the following sets are convex.

(a) A = {(x, y) ∈ R2 | x2 + y 2 ≤ 1}.

(b) A = {(x, y) ∈ R2 | x ≥ y 2 }.
(c) A = {(x, y) ∈ R2 | y ≥ e2x }.
(d) A = {(x, y) ∈ R2 | x − y ≤ 2}.
(e) A = {(x, y) ∈ R2 | y ≥ x4 + 2x2 − x − 3}.
(f) A = {(x, y) ∈ R2 | y ≤ sin(x)}.
(g) A = {(x, y) ∈ R2 | x ≥ y 3 }.
(h) A = {(x, y) ∈ R2 | y ≥ x12 }.
(i) A = {(x, y) ∈ R2 | x ≤ −y 6 − 3x2 + 12, y ≥ 4}.

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Solution

(a) A = {(x, y) ∈ R2 | x2 + y 2 ≤ 1}. Convex set.

(b) A = {(x, y) ∈ R2 | x ≥ y 2 }. Convex set.

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(c) A = {(x, y) ∈ R2 | y ≥ e2x }. Convex set.

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(d) A = {(x, y) ∈ R2 | x − y ≤ 2}. Convex set.

(e) A = {(x, y) ∈ R2 | y ≥ x4 + 2x2 − x − 3}. Convex set.

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(f) A = {(x, y) ∈ R2 | y ≤ sin(x)}. Not convex.

(g) A = {(x, y) ∈ R2 | x ≥ y 3 }. Not convex.

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 (h) A = {(x, y) ∈ R2 | y ≥ x12 }. Not convex.

(i) A = {(x, y) ∈ R2 | x ≤ −y 6 − 3x2 + 12, y ≥ 4}. The

conditions cannot be satisfied simultaneously, hence A is
the empty set (∅), and thus convex.

3. Let A and B be convex sets in Rn . Define the set A + B as

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(note that this is not the union):
A + B = {z ∈ Rn | w = a + b, a ∈ A, b ∈ B}
Show that the new set A + B is also convex.
Solution
This problem asks to prove that the sum of convex sets is a
convex set.

Proof. We say that A + B is convex if for any two points

(z, w) ∈ A + B the segment joing them also belongs to A + B.
Formally,
A + B convex ⇐⇒ ∀(z, w) ∈ A + B ⇒ zw ⊂ A + B.
Let, z ∈ A + B. This means z that it is composed by the sum
of two elements m and n where m ∈ A and n ∈ B. Formally,
z ∈ A + B ⇐⇒ z = m + n, m ∈ A, n ∈ B
Similarly,
w ∈ A + B ⇐⇒ w = a + b, a ∈ A, b ∈ B
Define the segment joining z and w as their convex combina-
tion, namely
zw = λz + (1 − λ)w = λ(m + n) + (1 − λ)(a + b), ∀λ ∈ [0, 1]
Note that we can write,
λ(m + n) + (1 − λ)(a + b) = (λm + (1 − λ)a) + (λn + (1 − λ)b)
where,
λm + (1 − λ)a ∈ A
because (m, a) ∈ A and A is convex; and
λn + (1 − λ)b ∈ B

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 because (n, b) ∈ B and B is convex.
Hence, for a given value λ, (λm+(1−λ)a)+(λn+(1−λ)b) ∈
A + B as it is composed of the sum of two elements belonging
to set A and B respectively.
As we consider all values of λ ∈ [0, 1], we obtain all the points
of the segment zw and we conclude that zw ⊂ A + B so that
A + B is a convex set.

4. Consider an individual consuming two goods, bread and water

in quantities xb and xw respectively. The market prices of these
goods are pb = 1e and pw = 2e. The consumer has an income
of 10e to spend in those two goods.

(a) Define the set of feasible consumption bundles.

(b) Assess whether that set is closed, bounded, compact and
convex.
(c) Draw the set.

Solution

(a) The set is

B = {(xb , xw )|xb + 2xw ≤ 10}

(b) B is closed, bounded, compact and convex.

(c) Draw the set.

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 xb
10

xw
0 5
5. Consider a firm with a technology that uses (hours of) labor to
produce straw hats. The production function is
1
y = l2

(a) Define and draw the production set.

(b) Assess whether that set is closed, bounded, compact and
convex.
(c) Suppose there is a regulation limiting the number of hours
to l. Draw the new production set. Assess whether that set
is closed, bounded, compact and convex.

Solution

(a) The production set is

√
Y = {y|y ≤ l}

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 y y

l l
0 0
l
Production set in (a) Production set in (c)

(b) The set is closed, unbounded and convex.

(c) The set is closed, bounded, compact and convex.

6. Compute the following matrix determinants:

1 0 −3 −1 1 1 2 0 1
a) −1 6 7 ; b) 1 −1 1 ; c) 1 1 0
0 1 1 1 1 −1 2 0 −2
−4 −6 −2 1 0 3
d) 2 4 2 ; e) −1 1 1
−2 −3 −1 2 1 −1

Solution
You should know how to compute the determinants using the
cofactor expansion. You can use Sarrus’ rule or the Matrix
Calculator to verify the results. The solutions are
(a) This can be found by cofactor expansion down the first column as
6 7 0 −3
1 · (−1)2 + (−1) · (−1)3 = −1 + 3 = 2.
1 1 1 1
(b) 4
(c) -6
(d) 0
(e) -11

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7. Solve the following equations

x 2x + 1 2x + 1 4 8 6
a) 2x + 1 3x − 1 4x = 0; b) 5 7 12 = 0
3x − 1 4x 6x − 1 3 −1 x

Solution

x 2x + 1 2x + 1
a) 2x + 1 3x − 1 4x = −6x2 + 3x
3x − 1 4x 6x − 1
and
1
−6x2 + 3x = 0 ⇔ x = {0, }
2
4 8 6
b) 5 7 12 = −12x + 180
3 −1 x
and
−12x + 180 = 0 ⇔ x = 15
8. Verify that the following equations are true

a+b a a
a) a a+b a = b2 · (3a + b)
a a a+b
a−b−c 2a 2a
b) 2b b−a−c 2b = (a + b + c)3
2c 2c c−a−b

Solution

a+b a a
[a)] a a+b a | = 3ab2 + b3 = b2 (3a + b)
a a a+b

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 a−b−c 2a 2a
[b)] 2b b−a−c 2b =
2c 2c c−a−b
6abc+3ab2 +a3 +3ac2 +3b2 c+b3 +3ba2 +3bc2 +3ca2 +c3 = (a+b+c)3

9. When possible, find the inverse of the following matrices

3 2 31
   
   8
 1 −1 2
3 8 −4 3
a) ; b) ; c) −2 3 1 ; d) −2 1 0
5 − 43 11 2
3 −1 1 0 −1 5
Solution
−1
−4 −3
    
3 8 4 −8 1 3 32
a) = =
5 − 34 169 −5 3 169 20 −12
−1
−4 83
    3 1
−3 2 −11 −
b) = 8 = 3256 14 3
11 2 112 − 3 4 112 28
3 −1 −1 −1 −1 3
 
 1 1 −
 −1 2 1 2 1 
1 −1 2  
−1  −2 3
 1 3 1 −2 
c) −2 3 1 = − − 
15  1 1 2 1 2 1 
3 −1 1 
 −2 3

1 3 1 −2 
−
3 −1 −1 −1 −1 3
 
−4 1 7
1 
−5 5 5
15
7 2 −1
−1
2 13
  
3 15 −31 −1
1 
d) −2 1 0 = 30 45 −2
107
0 −1 5 6 9 21
10. Compute the rank of the following matrices

3 2 31
   
    −2 3 1
2 3 2 3 1
a) ; b) ; c)  1 −1 0 ; d) −2 1 0
−4 −6 1 2 3
0 1 1 0 −1 5

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 Solution
Find the largest nonsingular square submatrix.
(a) The matrix is singular, because its determinant is zero. Thus, the rank
is 1.
(b) The rank can
 be no larger than 2, because there are only 2 rows. The
2 3
submatrix is nonsingular, so the rank is 2.
1 2
(c) The determinant of the whole matrix is zero (the third column minus
the first gives
 the second
 column), so the rank is lower than 3. The
3 1
submatrix is nonsingular (determinant is 1), so the rank is
−1 0
2.
(d) The determinant of the whole matrix is nonzero (verify that), so the
rank is 3.

11. Compute the rank of the following matrices as a function of the

parameter a
     
1 2 3 a 1 0 a 1 1
a) 1 a 1 ; b) 2 2 a  ; c) 1 a 1 ;
2 3 4 1 a −1 1 1 a

Solution

(a)  
1 2 3
det 1 a 1 = −2a + 2
2 3 4
Then, −2a + 2 = 0 ⇔ a = 1. Therefore,
  (
1 2 3
2 if a = 1
rk 1 a 1 =
2 3 4 3 if a 6= 1

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 (b)  
a 1 0
det 2 2 a  = −a3 − a + 2
1 a −1
Then, −a3 − a + 2 = 0 ⇔ a = 1. Therefore,
  (
a 1 0
2 if a = 1
rk 2 2 a  =
1 a −1 3 if a 6= 1

(c)  
a 1 1
det 1 a 1 = a3 − 3a + 2
1 1 a
Then, a3 − 3a + 2 = 0 ⇔ a = {1, −2}. Checking the rank
for these two cases, we find that
 
1 if a = 1

a 1 1 
rk 1 a 1 = 2 if a = −2
1 1 a

3 if a 6= {1, −2}


12. [Sydsaeter-Hammond (1995, Example 12.21)] Consider three

firms competing in a market whose market shares on January
1, 2017 were m1 = 0.2, m2 = 0.6, m3 = 0.2. Along the year
2017 the following changes in market shares occurred:

• Firm 1 keeps 85% of its customers, while losing 5% to

Firm 2, and 10% to Firm 3;
• Firm 2 keeps 55% of its customers, while losing 10% to
Firm 1, and 35% to Firm 3;
• Firm 3 keeps 85% of its customers, while losing 10% to
Firm 1, and 5% to Firm 2.

(a) Define the vector of market shares.

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 (b) Define the transition matrix.
(c) Compute the vector of markets shares on January 1, 2018.

Solution

(a) Define the vector of initial market shares.

 
0.2
m = 0.6
0.2

(b) Define the transition matrix.

 
0.85 0.10 0.10
T = 0.05 0.55 0.05
0.10 0.35 0.85

(c) Compute the vector of markets shares on January 1, 2018.

    
0.85 0.10 0.10 0.2 0.5
T s = 0.05 0.55 0.05 0.6 = 0.35
0.10 0.35 0.85 0.2 0.40

13. An employer want to estimate the performance of the employ-

ees based on the scores obtained in an ability test and in a re-
sponsibility test. The data obtained is collected in the following
table, where y stands for performance, x1 for ability, and x2 for
responsibility.
y x1 x2
1 4 2.5
3 5.5 3
5 6 3.8

The employer thinks that a linear model of the type

y = b1 x1 + b2 x2

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will be accurate enough, and plans to use ordinarily least squares.
This means that the vector of parameters b is obtained as the so-
lution of the following computation:

b = (X 0 X)−1 X 0 Y

where X is the matrix of values of the variables x1 and x2 ; X 0 is

the transpose of matrix X, and Y is the vector of performance.
Compute the parameters b1 and b2 .
Solution
First, we define matrices X and Y . These are
   
4 2.5 1
X = 5.5 3  ; Y = 3
6 3.8 5
so that,  
4 5.5 6
X0 =
2.5 3 3.8
Then,  
82.25 49.3
X 0X =
49.3 29.7
and  
0 −1 2.40 −3.89
(X X) =
−3.89 6.66
Also,  
050.5
XY =
30.5
Finally the estimated values of the parameters b1 and b2 are
   
b1 −0.49
= (X 0 X)−1 X 0 Y =
b2 1.63

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14. Classify and if possible, solve the following systems of equa-
tions (we wrote these systems in matrix form in the previous
problem set):
 

 x + 4y + 8z = 0 2x − 5y + 3z = −12

(a) −2x + 5y − 2z = 3 (b) 3x + 2y − 5z = 1
 
3x + 7y + z = 2 7x − 4y + 2z = 0
 
 
x + 2y − 3z = −7
 x − 3y + z = −13

(c) 3x + 2y + 5z = −1 (d) 2x + 4y + 3z = 47
 
4x − y + z = 25 3x + 5y − 2z = 44
 

x − y + z = 6

(e) x + y − z = 2

x + y + z = 12


Solution

(a) We defined A and b in the previous problem set. Write

the coefficient

matrix A and the augmented matrix A∗ =
A |b :
 
1 4 8
A = −2 5 −2
3 7 1
 
1 4 8 |0
∗
A = −2 5 −2 |3
3 7 1 |2

The ranks of both matrices are 3, so the Rouché-Capelli

theorem guarantees a unique solution. We can calculate
   
x −0.26
 y  = A−1 b =  0.42 
z −0.18

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(b) Write the system in matrix form
 
2 −5 3 | −12
A∗ = 3 2 −5 | 1 
7 −4 2 | 0

Then, det(A) = 95 6= 0, rk(A) = rk(A∗ ) = 3 ⇒ unique

solution:
x = 2, y = 5, z = 3
(c) Write the system in matrix form
 
1 2 −3 | −7
A∗ = 3 2 5 | −1
4 −1 1 | 25

Then, det(A) = 74 6= 0, rk(A) = rk(A∗ ) = 3 ⇒ unique

solution:
175 241 16
x= , y=− , z=−
37 37 37
(d) Write the system in matrix form
 
1 −3 1 | −13
A∗ = 2 4 3 | 47 
3 5 −2 | 44

Then, det(A) = −64 6= 0, rk(A) = (rkA∗ ) = 3 ⇒

unique solution:

x = 5, y = 7, z = 3

(e) Write the system in matrix form

 
1 −1 1 | 6
A∗ = 1 1 −1 | 2 
1 1 1 | 12

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 Then, det(A) = 4 6= 0, rk(A) = rk(A∗ ) = 3 ⇒ unique
solution. We can solve using Cramér’s Rule:
6 −1 1 1 6 1 1 −1 6
2 1 −1 1 2 −1 1 1 2
12 1 1 16 1 12 1 12 1 1 12 20
x= = ; y= = ; z= =
det(A) 4 det(A) 4 det(A) 4
Therefore, the solution is

x = 4, y = 3, z = 5

15. Classify and if possible, solve the following systems of linear

equations (we wrote these systems in matrix form in the previ-
ous problem set):
 

 2x + 3y − 7z = −1 3x + 2y − 4z = 1

(a) 3x + 4y − 6z = 5 (b) 5x − y − 2z = 2
 
5x − 2y + 4z = −7 x + 3y − z = 3
 

2x − 5y + 3z = −12
 (
x − 2y + z = 3
(c) 3x + 2y − 5z = 1 (d)
 3x + y − 5z = 2
7x − 4y + 2z = 0


3x + 5y = 1

(e) 2x − y = 23

2x + 25y = −6


Solution

(a) Write the system in matrix form

 
2 3 −7 | −1
A∗ = 3 4 −6 | 5 
5 −2 4 | −7

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 Then, det(A) = −64 6= 0, rk(A) = rk(A∗ ) = 3 ⇒
unique solution:

x = −1, y = 5, z = 2

(b) Write the system in matrix form

 
3 2 −4 | 1
A∗ = 5 −1 −2 | 2
1 3 −1 | 3

Then, det(A) = −37 6= 0, rk(A) = rk(A∗ ) = 3. Solving

using Cramér’s rule, we obtain,
1 2 −4 3 1 −4 3 2 1
2 −1 −2 5 2 −2 5 −1 2
3 3 −1 −37 1 3 −1 37 1 3 3 37
x= = ; y= = ; z= =
det(A) −37 det(A) 37 det(A) 37
Therefore, the solution is

x=y=z=1

(c) Write the system in matrix form

 
2 −5 3 | −12
A∗ = 3 2 −5 | 1 
7 −4 2 | 0

Then, det(A) = 95 6= 0, rk(A) = rk(A∗ ) = 3 ⇒ unique

solution:
x = 2, y = 5, z = 3
(d) Write the system in matrix form
 
∗ 1 −2 1 | 3
A =
3 1 −5 | 2

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 Given that, rk(A) = rk(A∗ ) = 2, while there are 3 un-
knowns. Therefore, the Rouché-Capelli theorem tells us
that the system is undetermined. The solution will depend
on (3 − 2) = 1 parameter. We can write
    
1 −2 x 3−z
=
3 1 y 2 + 5z
   −1  
x 1 −2 3−z
=
y 3 1 2 + 5z
  
1/7 2/7 3−z
=
−3/7 1/7 2 + 5z
 9 
z+1
= 87
7z − 1
and z is a free variable that can take any value.
(e) Write the system in matrix form
 
3 5 | 1
A∗ = 2 −1 | 23 
2 25 | −6
Given that rk(A) = 2 6= rk(A∗ ) = 3, the Rouché-Capelli
theorem tells us that the system is incompatible, and thus
has no solution.
16. Classify and solve the following systems of linear equations as
a function of the parameter a:
 
2x + y + az = 4
 ax + y + z = 1

(a) x + z = 2 (b) x + ay + z = 2
 
x+y+z =2 x + y + az = 3
 

x + 2y + 3z = 0

(c) x + ay + z = 0

2x + 3y + 4z = 2


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Solution

(a) As before, the coefficient matrix, A, and augmented coef-

ficient matrix, A∗ are :
 
2 1 a
A = 1 0 1
1 1 1
 
2 1 a | 4
∗
A = 1 0 1 | 2
1 1 1 | 2
Then, det(A) = a − 2, det(A) = 0 ⇔ a = 2. Hence,
(
a = 2 ⇒ rk(A) = 2 = rk(A∗ ) (Two equal columns) Infinite solutions
a 6= 2 ⇒ rk(A) = 3 = rk(A∗ ) ⇒ Unique solution
(b)  
a 1 1 | 1
A∗ = 1 a 1 | 2
1 1 a | 3
Then, det(A) = a3 − 3a + 2; det(A) = 0 ⇔ a = 1, −2.
Hence,



 if a = 1 then ⇒ rk(A) = 1 6= 2 = rk(A∗ )




 ⇒ Incompatible
if a = −2 then ⇒ rk(A) = 2 6= 3 = rk(A∗ )




 ⇒ Incompatible
if a 6= {1, −2} then ⇒ rk(A) = 3 = rk(A∗ )






⇒ Compatible and determinate

(c)  
1 2 3 | 0
A∗ = 1 a 1 | 0
2 3 4 | 2

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 Then, det(A) = −2a + 2; det(A) = 0 ⇔ a = 1. Hence,



 if a = 1 then ⇒ rk(A) = 2 6= 3 = rk(A∗ )

⇒ Incompatible


 if a 6= 1 then ⇒ rk(A) = 3 = rk(A∗ )

⇒ Compatible and determinate

17. Consider a two good economy (j = 1, 2) where two individu-

als(i=a,b) aim at consuming the following bundles:
(qa1 , qa2 ) = (10, 8); (qb1 , qb2 ) = (6, 12)
These individuals are endowed with incomes (wa , wb ) = (50, 60).
Determine, using matrix algebra, whether there exists a price
system (p1 , p2 ) such that those consumption bundles are feasi-
ble.
Solution
We can describe the two consumers through their budgets con-
straints as
p1 qa1 + p2 qa2 = wa
p1 qb1 + p2 qb2 = wa
that is
10p1 + 8p2 = 50
6p1 + 12p2 = 60
or in matrix form
    
10 8 p1 50
=
6 12 p2 60
The problem to solve is
   −1    1 1
 
p1 10 8 50 6 − 9 50
= = 1 5 =
p2 6 12 60 − 12 36 60
 50 60   150−120   5 
6 − 9 18
= −150+300 3
= 25
50
− 12 + 300
36 36 6

34
18. Consider problem 15 (b)

3x + 2y − 4z = 1
5x − y − 2z = 2 . (1)
x + 3y − z = 3

We know from having already done the problem that the solution is x =
1; y = 1; z = 1.

(a) verify that the following representation of problem

       
3 2 −4 1
x  5  + y  −1  + z  −2  =  2  (2)
1 3 −1 3

is equivalent to the system in eqn. 1.  

3
Solution: scalar multiplication of a vector tells us that x  5  =
  1
3x
 5x  . Repeating this for the second and third terms of eqn. 2, and
x
then summing, we obtain the left hand side of 1. The right hand sides
are obviously equal.
(b) Plot the 3 vectors ( 3 5 1) , ( 2 −1 3) and ( −4 −2 −1)
using Geogebra 3d. Hint: to enter the first vector, type Vector((3,5,1)).
(c) Plot the combination
     
3 2 −4
x  5  + y  −1  + z  −2 
1 3 −1

for different values of (x, y, z).

(d) Now, plot the same combination setting (x, y, z) to (1, 1, 1). What is
the resulting vector?
Solution for (b), (c), and (d)

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