Faculty of Economics

Mathematics I.

Budapest
Fall 2023
 Contents

Contents

1 Linear algebra – Matrices and vectors 3

1.1 Motivating example and introduction . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Notions and methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2.1 Types of special matrices . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2.2 Matrix operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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 1 Linear algebra – Matrices and vectors

1 Linear algebra – Matrices and vectors

1.1 Motivating example and introduction

The stock at two sites of a company that operates a discount gas station is given in a table:
gasoline (liter) diesel (liter)
 
Site 1 6000 8000
Site 2 7000 4000
Once we know what the individual rows and columns cover, we can omit the captions.
 
6000 8000
7000 4000
Such a rectangular arrangement of data is called a matrix.In general, a matrix is a collection
of numbers arranged into rows and columns in a rectangular form. An important attribute of
a matrix is its size or dimension, i.e., the number of rows and columns. A matrix is of size of
𝑛 × 𝑘 if it has 𝑛 rows and 𝑘 columns. For example, matrix
   
2 3 1 2 3 1
𝐴= or 𝐴 =
0 1 2 0 1 2
is a 2 by 3 matrix, it has 2 rows and 3 columns. The individual items in an 𝑛 × 𝑘 matrix 𝐴, which
are denoted by 𝑎𝑖 𝑗 where 𝑖 and 𝑗 vary from 1 to 𝑛 and 1 to 𝑘, respectively are called its elements
or entries:
𝑎 𝑎 12 . . . 𝑎 1𝑘
© 11
..
­𝑎 21 𝑎 22 . . . 𝑎 2𝑘 ®
ª © . ª

𝐴 = ­ .. or shortly ­· · · · · ·® or
­ ®
­ .. .. ®® , 𝑎𝑖 𝑗 𝑎𝑖 𝑗
­ . . . ® ­ .. ®
𝑎 𝑎 . . . 𝑎 .
« 𝑛1 𝑛2 𝑛𝑘 ¬ « ¬

1.2 Notions and methods

1.2.1 Types of special matrices
1. If a matrix has only one row or only one column it is called a vector. A matrix of dimension
1 × 𝑘 consists of a single row, and is called a row vector. A matrix of dimension 𝑛 × 1
consists of a single column, and is called a column vector. For example, the row vector


v= 1 3

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 1 Linear algebra – Matrices and vectors

represents a point in the Cartesian coordinate system, but also represents a (position)
vector pointing there from the origin. Similarly, column vector

2
w = ­−1®
© ª

«5¬
corresponds to a (position) vector in the three dimensional space pointing from the origin
to the point (2, −1, 5).
2. A matrix is called a square matrix if it has an equal number of rows and columns.
3. A matrix is called a null matrix or zero matrix if all its elements are equal to zero. The
zero matrix of dimension 𝑛 × 𝑘 is sometimes written as 0𝑛×𝑘 , but usually it is just denoted
by 0. In this case the dimension of the zero matrix must be determined from the context.
4. The main diagonal of a square matrix is the set of all elements that lie on the imaginary line
that runs from the top left corner to the bottom right corner of the matrix, in other words,
those elements whose row and column indices are the same. The elements belonging to
the diagonal are called diagonal elements, and all other elements are called off-diagonal.
5. A square matrix is diagonal if all the off-diagonal entries are zero.

𝑎 0 ... 0
© 11
­ 0 𝑎 22 . . . 0 ®
ª
­ .
­ . .. .. ®® .
­ . . . ®
«0 0 . . . 𝑎𝑛𝑛 ¬

6. The identity matrix is a matrix in which all the elements on the main diagonal are equal
to 1 and all other elements are equal to 0. For matrix products (see Matrix operations) the
role of 1 is played by the identity matrix. The 𝑛 × 𝑛 identity matrix is denoted by 𝐼𝑛 . For
example,
  1 0 0
1 0
𝐼2 = , 𝐼 3 = ­0 1 0® .
© ª
0 1
«0 0 1¬

7. A permutation matrix is a square matrix with exactly one entry of each row is being one,
exactly one entry of each column is being one, and all other entries equal to zero, e.g.

0 1 0
𝑃 = ­0 0 1®
© ª

«1 0 0¬

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 1 Linear algebra – Matrices and vectors

1.2.2 Matrix operations

1. The transpose of an 𝑛 × 𝑘 matrix 𝐴 is the 𝑘 × 𝑛 matrix 𝐴> formed by turning rows into
columns and vice versa. For example, if

  −1 0
−1 3 0
𝐴= then 𝐴> = ­ 3 2®
© ª
0 2 1
« 0 1¬

2. Two matrices of the same dimension can be added together. The result is another matrix of
the same dimension, obtained by adding the corresponding elements of the two matrices.
For example,
       
−1 3 0 2 1 4 −1 + 2 3 + 1 0 + 4 1 4 4
+ = =
0 2 1 −1 0 1 0−1 2+0 1+1 −1 2 2

Matrix subtraction is similar. As an example,

         
−1 3 −1 3 1 0 −1 − 1 3 − 0 −2 3
− 𝐼2 = − = =
0 2 0 2 0 1 0−0 2−1 0 1

Adding the null matrix to any arbitrary matrix 𝐴, we get the matrix itself: 𝐴 + 0 = 𝐴. Zero
matrices play a similar role in matrix operations as the number zero plays in operations
with real numbers.
3. A matrix 𝐴 and a number 𝑐 can be multiplied. The resulting scalar multiple of 𝐴 with 𝑐
can be computed by multiplying every entry of 𝐴 by 𝑐. For example, if
   
−1 3 −3 9
𝐴= and 𝑐 = 3, then 𝑐𝐴 =
0 2 0 6

4. We also interpret the product of two matrices, but this does not mean multiplication
element by element.
Let’s first look at an example of what we mean by matrix multiplication.
Each type of fuel is planned to be sold at two different prices at the two stations. This is
also given in a table.

unit prices, plan I. (1000 Ft/liter) unit prices, plan II. (1000 Ft/liter)
 
gasoline 0.620 0.630
diesel 0.650 0.640

To determine how much money they can expect at each planned price, you need to
calculate the revenue from each fuel at both stations.

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 1 Linear algebra – Matrices and vectors

Site 1, gasoline, price I: 6000 · 0.620 = 3720 (1000 Ft)

Site 1, diesel, price I: 8000 · 0.650 = 5200 (1000 Ft)
Site 1, price I, altogether: 8920 (1000 Ft)
Site 1, gasoline, price II: 6000 · 0.630 = 3780 (1000 Ft)
Site 1, diesel, price II: 8000 · 0.640 = 5120 (1000 Ft)
Site 1, price II, altogether: 8900 (1000 Ft)
Site 2, gasoline, price I: 7000 · 0.620 = 4340 (1000 Ft)
Site 2, diesel, price I: 4000 · 0.650 = 2600 (1000 Ft)
Site 2, price I, altogether: 6940 (1000 Ft)
Site 2, gasoline, price II: 7000 · 0.630 = 4410 (1000 Ft)
Site 2, diesel, price II: 4000 · 0.640 = 2560 (1000 Ft)
Site 2, price II, altogether: 6970 (1000 Ft)
For clarity, we enter the data as a matrix and arrange them in such a way that it is easier
to keep track of what we are multiplying by.
 
0.620 0.630
0.650 0.640
 
6000 8000
7000 4000

This is how we perform the multiplication.

 
0.620 0.630
0.650 0.640
    
6000 8000 6000 · 0.620 + 8000 · 0.650 6000 · 0.630 + 8000 · 0.640 8920 8900
=
7000 4000 7000 · 0.620 + 4000 · 0.650 7000 · 0.630 + 4000 · 0.640 6940 6970

Written back into a table

revenue according to plan I. revenue according to plan II.
 
Site 1 8920 8900
Site 2 6940 6970

You can multiply two matrices 𝐴 and 𝐵 provided their dimensions are compatible, which
means the number of columns of 𝐴 equals the number of rows of 𝐵. Suppose 𝐴 is an 𝑚 ×𝑘
and 𝐵 is a 𝑘 × 𝑛 matrix, then the product matrix 𝐴𝐵 is a matrix of a dimension 𝑚 × 𝑛. To
find the 𝑖 𝑗th element of this product, you need to use the 𝑖th row of 𝐴 and the 𝑗th column
of 𝐵. “Moving left to right along the 𝑖th row of 𝐴” while “moving top to bottom down the
𝑗th column of 𝐵”, you keep a running sum of the product of elements, one from 𝐴 and one
from 𝐵. The elements of the product matrix 𝐶 = (𝑐𝑖 𝑗 ), which is obtained by multiplying

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 1 Linear algebra – Matrices and vectors

matrices 𝐴 = (𝑎𝑖 𝑗 ) and 𝐵 = (𝑏𝑖 𝑗 ), are 𝑐𝑖 𝑗 = 𝑎𝑖1𝑏 1𝑗 + 𝑎𝑖2𝑏 2𝑗 + . . . + 𝑎𝑖𝑘 𝑏𝑘 𝑗 , so that

𝑗th
column
↓
. .. .. ©... 𝑏 1𝑗 ...ª ..
© .. . . ª ­ ® © . ª
𝑖th row ­ ® ­... 𝑏 2𝑗 ...® ­ ®
−→ ­­ 𝑎𝑖1 𝑎𝑖𝑠 . . . 𝑎𝑖𝑘 ®® ­ ®= ­ . . . 𝑐𝑖 𝑗 . . . ®®
­ .. ® ­
­ .
. .. .. ® ­
­ . ®
®
­ .. ®
« . . . ¬ .
«... 𝑏𝑘 𝑗 ...¬ « ¬

For example,
     
1 2 5 6 1·5+2·7 1·6+2·8 19 22
= = , and
3 4 7 8 3·5+4·7 3·6+4·8 43 50
      
5 6 1 2 5·1+6·3 5·2+6·4 23 34
= = .
7 8 3 4 7·1+8·3 7·2+8·4 31 46

In general, matrix multiplication is not commutative: we do not (in general) have 𝐴𝐵 = 𝐵𝐴.
In fact, 𝐵𝐴 may not even make sense, or, if it makes sense, it may have different dimension
than 𝐴𝐵. For example, if 𝐴 is 2 × 3 and 𝐵 is 3 × 4, then 𝐴𝐵 makes sense (the dimensions
are compatible), but 𝐵𝐴 does not even make sense (the dimensions are incompatible).
Even when 𝐴𝐵 and 𝐵𝐴 both make sense and are the same dimension, i.e., when 𝐴 and 𝐵
are square matrices, we do not (in general) have 𝐴𝐵 = 𝐵𝐴.
Even though matrix multiplication is not commutative, it is associative: if 𝐴 is an 𝑚 × 𝑝
matrix, 𝐵 is a 𝑝 × 𝑞 matrix, and 𝐶 is a 𝑞 × 𝑛 matrix, then 𝐴(𝐵𝐶) = (𝐴𝐵)𝐶.
We note that multiplying a matrix by the identity matrix gives the same matrix. The
identity matrix plays a similar role in matrix operations as number 1 plays in operations
with real numbers.
5. The inverse of an 𝑛 × 𝑛 square matrix 𝐴 is the matrix 𝐴−1 for which 𝐴 · 𝐴−1 = 𝐴−1 · 𝐴 = 𝐼𝑛 .
Not all square matrices have an inverse. There are procedures to find the inverse matrix,
but it can also be found with various software. In the case of a 2 × 2 matrix, the inverse
𝑎 𝑏
can easily be calculated as follows. Let 𝐴 = , then if det 𝐴 = 𝑎𝑑 − 𝑏𝑐 ≠ 0, the
𝑐 𝑑
 
1 𝑑 −𝑏
inverse of the matrix 𝐴 is 𝐴−1 = 𝑎𝑑−𝑏𝑐 .
−𝑐 𝑎
The determinant of a square matrix, det 𝐴, will be defined later in general.

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 1 Linear algebra – Matrices and vectors

1.3 Exercises
1.3.1
Given the matrices below, evaluate the expressions, if possible. If it is not possible, explain why.
       
4 6 3 −2 2 −1 −3 4 −1 3
𝐴= 𝐵= 𝐶= 𝐷=
2 5 −1 6 6 0 2 −5 −1 −3
1. dimensions of 𝐵 2. dimensions of 𝐷

3. dimensions of 𝐴 + 𝐵 4. dimensions of 𝐶 − 𝐷

5. 𝑎 12 6. 𝑏 21 7. 𝑐 13 8. 𝑑 23

9. 𝐴 + 𝐵 10. 𝐴 − 𝐵 11. 𝐴 + 𝐶

12. 3𝐷 13. −2𝐵 14. 𝐶 − 𝐷

15. 𝐷 − 𝐶 16. 3𝐴 + 2𝐵 17. 𝐴−1

1.3.2
Let      
2 3 −1 4 5 −5
𝑈 = 𝑉 = 𝑊 =
1 2 0 2 4 7
Verify the following identities for the given matrices.
1. 𝑈 + 𝑊 = 𝑊 + 𝑈
2. 2𝑊 + 3𝑊 = 5𝑊
3. 4(𝑈 + 𝑉 ) = 4𝑈 + 4𝑉
4. 2(3𝑉 ) = 6𝑉
5. 𝑉 · 𝑊 > = (𝑊 · 𝑉 > ) >
6. (𝑉 · 𝑊 ) · 𝑈 = 𝑉 · (𝑊 · 𝑈 )

1.3.3
In this problem 𝑅 and 𝑀 are matrices of mean SAT scores (SAT is a standardized test widely
used for college admissions in the United States). The columns are average SAT reasoning
scores for the years 2001-2008. The first row is scores for males and the second row is scores

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 1 Linear algebra – Matrices and vectors

for females. Matrix 𝑅 is the Critical Reading scores, and matrix 𝑀 is the Mathematics scores.
 
509 507 512 512 513 505 504 504
𝑅=
502 502 503 504 505 502 502 500
 
533 534 537 537 538 536 533 533
𝑀=
498 500 503 501 504 502 499 500

1. Calculate 𝑅 + 𝑀. What does this represent?

2. Calculate 𝑀 − 𝑅. What does this represent?

1.3.4
The number of meals, 𝑁 , and the cost of the meals, 𝐶, for a weekend class reunion are given by
the matrices
  8
20 35 70
𝑁 = and 𝐶 = ­12® .
© ª
30 35 50
«50¬

The first column of 𝑁 is the number of breakfasts, the second is the number of lunches, and the
third is the number of dinners. The first row of 𝑁 is the meals needed on Saturday, the second
on Sunday. The first row of 𝐶 is the cost of breakfast, the second row is the cost of lunch, and
the last row is the cost of dinner.
1. Calculate 𝑁𝐶.
2. What is the practical meaning of 𝑁𝐶?

1.3.5
The vectors





𝑃 = 5 22 35 18 , 𝑆 = 20 33 14 40 , 𝐹 = 12 28 25 20 , 𝑊 = 2 19 42 12

represent the average number of customers in the morning, early afternoon, late afternoon,
and evening in a cafe
during spring (𝑃), summer (𝑆), fall (𝐹 ), and winter (𝑊 ). For example,
𝑃 = 5 22 35 18 means that, in spring, the cafe has an average of 5 customers in the
morning, 22 in the early afternoon, 35 in the late afternoon, and 18 in the evening.
1. In what season does the cafe have the most customers on an average day?
2. In what season does the cafe have the most customers on the average late afternoon?
3. At what time of day does the cafe have the most customers in an average summer?
4. Find 𝑄 = 𝑆 − 𝑃. What does 𝑄 represent?
5. Find 𝐻 = 91𝑊 . What might 𝐻 represent? [Hint: Assume there are 91 days in winter.]

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 1 Linear algebra – Matrices and vectors

6. Find 𝐴 = 91(𝑃 + 𝑆 + 𝐹 + 𝑊 ) . What might 𝐴 represent? [Hint: Assume each season is 91

days long.]

1.3.6
In the following problems the matrices refer to Olympic medal counts. The columns are the
numbers of gold, silver, and bronze medals, and the rows are the number of medals for Australia,
China, Germany, Russia and the United States.

9 9 23 16 25 17
­16 22 12® ­28 16 15®
© ª © ª
𝐸 = 1996 Olympics = ­20 18 27® 𝐹 = 2000 Olympics = ­13 17 26®
­ ® ­ ®
­26 21 16® ­32 28 28®
­ ® ­ ®

«44 32 25¬ «40 24 33¬

17 16 16 14 15 17
­32 17 14® ­51 21 28®
© ª © ª
𝐺 = 2004 Olympics = ­14 16 18® 𝐻 = 2008Olympics = ­16 10 15®
­ ® ­ ®
­27 27 38® ­23 21 28®
­ ® ­ ®

«35 39 29¬ «36 38 36¬

1. Calculate 𝐻 − 𝐺. What does this represent?

2. Calculate 𝐸 + 𝐹 + 𝐺 + 𝐻 . What does this represent?
3. Calculate 14 (𝐸 + 𝐹 + 𝐺 + 𝐻 ). What does this represent?

1.3.7
A car mechanic sells 4 different types of tires. The unit price and the number of tires in stock
are listed in the following table.
Tire 1 Tire 2 Tire 3 Tire 4
Unit price (Ft/pc) 13000 21000 43000 10000
In stock (pc) 10 5 2 8
Consider vectors v from the first row of the table, and vector w from the second row of the
table. What is the value of the product v · w> ? What is the interpretation of the product v · w>
in everyday terms?

1.3.8
The tables below contain test scores of four students based on two written exams.

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 1 Linear algebra – Matrices and vectors

Test 1. Problem 1. Problem 2. Problem 3.

Mary 0 4 5
Vicky 4 3 6
John 2 0 6
Mark 5 3 1

Test 2. Problem 1. Problem 2. Problem 3.

Mary 2 2 4
Vicky 2 1 5
John 3 5 4
Mark 0 3 2
Let 𝐵 be the matrix of the scores on the first test from table, and let 𝐶 be the matrix of the scores
on the second test.
1. What do the following matrices mean in everyday terms?
1
𝐵 + 𝐶, 𝐶 − 𝐵, 𝐵 · v, u · 𝐶,
4
where
1
  
u = 1 1 1 1 , v = 1 ?
1
 

2. Write down and evaluate algebraic expressions involving the matrices 𝐵, 𝐶, u, v that
represent the following quantities.
a) The total score on the second exam for each student.
b) The total score on two tests for each student.
c) The average score for each problem on the first test.
d) The average score per student on the second test.

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