CHAPTER 3 - Matrix Algebra and Applications in Economics & Business To Students
CHAPTER 3 - Matrix Algebra and Applications in Economics & Business To Students
3 5 4
2 3
Examples: 𝐵 = [ ] is a 2 × 2 matrix denoted 𝐵22 and C= [6 7 6] is a 3× 3
1 4
4 −3 5
denoted 𝐶33 .
Remark: matrix names are always in capital letters (eg A or B or C …) and the
elements of a matrix are represented by lower case subscripted letters. For instance
𝑎𝑖𝑗 stands for the element in the 𝑖𝑡ℎ row and 𝑗𝑡ℎ column.
A) Types of matrices
- Row matrix: it is a matrix with only one row. For example A= [2 3] is a 1 × 2
matrix and B = [2 3 − 4] is a 1 × 3 matrix.
2
- Column matrix: it is a matrix with only one column. For example A =[ ] is a 2×
3
2
1 matrix and B =[ 3 ] is a 3 × 1 matrix.
−4
- Square matrix: it is a matrix in which the number of rows is equal to the
2 3
number of columns. For example 𝐴 = [ ] is a 2 × 2 matrix and B =
1 4
2 3 4
[2 3 4] is a 3 × 3 matrix.
1 4 5
- Diagonal matrix: it is a matrix that has zeros everywhere except on the leading
or main diagonal (the diagonal running from the upper left to the lower right).
2 0 0 2 0 0
2 0
For example, = [ ] ; B = [0 0 0] and C = [0 4 0]are diagonal
0 4
0 0 0 0 0 6
matrices.
Thus, we can say that a matrix is diagonal if 𝑎𝑖𝑗 is equal to zero for all elements
when 𝑖 ≠ 𝑗 and 𝑎𝑖𝑗 is not equal to zero for at least one element when 𝑖 = 𝑗.
1
- Identity matrix: it is a square matrix with the leading diagonal elements all
equal to 1 (one) and all other elements equal to 0 (zero). In other words, it is a
diagonal matrix with ones in the leading diagonal and zeros elsewhere.
1 0 0
1 0
Examples: = [ ] ; B = [0 1 0]
0 1
0 0 1
Note that if we multiply a matrix 𝐴𝑛𝑝 (with n = p) by an identity matrix, we
will obtain the same matrix regardless of whether we pre-multiply or post-
multiply. That is, 𝐼𝑛𝑛 × 𝐴𝑛𝑛 = 𝐴𝑛𝑛 × 𝐼𝑛𝑛 = 𝐴𝑛𝑛
- Zero or null matrix: it is a square matrix where every element is zero.
0 0
Example: 𝐴 = [ ]
0 0
Note that when we add or subtract a null matrix from another matrix, the
matrix remains unchanged. Note also that pre or post multiplying a matrix
with a zero matrix results to another zero matrix.
- Scalar matrix: it is a diagonal matrix whose diagonal elements are equal. For
1 0 0
2 0
𝐴=[ ] ; B = [0 1 0]
0 2
0 0 1
Note that all identity matrices are scalar matrices but not all scalar matrices
are identity matrices.
- Triangular matrix: a square matrix whose elements 𝑎𝑖𝑗 equal zero, when 𝑖 > 𝑗
is called an upper triangular matrix. If all elements 𝑎𝑖𝑗 equal zero when 𝑖 < 𝑗,
we have a lower triangular matrix. Examples:
1 3 4
A=[0 3 5 ] is an upper triangular matrix
0 0 10
1 0 0
B= [2 3 0] is a lower triangular matrix
4 6 1
Note that the transpose of a lower triangular matrix gives an upper triangular
matrix and vice versa.
B) OPERATIONS OF MATRICES
- MATRIX ADDITION AND SUBTRACTION
Given two matrices A and B of the same order, their addition is obtained by
adding their corresponding elements. Equally their subtraction is obtained by
subtracting their corresponding elements. For instance, if
2 3 1 1 1 8
A= [4 3 8] and B= [0 7 6] then
5 7 9 2 6 4
2+1 3+1 1+8 3 4 9
A + B = [4 + 0 3 + 7 8 + 6] = [4 10 14]
5+2 7+6 9+4 7 13 13
2
2−1 3−1 1−8 1 2 −7
A – B = [4 − 0 3 − 7 8 − 6] = [4 −4 2]
5−2 7−6 9−4 3 1 5
Take home:
3 −2 5 2 3 2
1) A = [ ],B=[ ] find (a) A + B and (b) A – B
−1 2 3 −3 4 6
We can observe that the resulting matrix of a multiplication has as order number
of rows of the first matrix and number of columns of the second matrix.
Take home:
1 2 2 1
1) A = [ ], B = [ ] find AB and BA
2 4 3 2
1 2
0 2 3
2) A = [ ], B = [2 −1] find AB and BA
1 2 −1
3 3
3
1 2 −1 2
0 2 3
3) A = [ ], B = [2 −1] and C = [ 1 0 ] find A(B+C)
1 2 −1
3 3 2 −2
- TRANSPOSITION
The transpose of a matrix A of order n×p is a p×n matrix denoted 𝐴/ or 𝐴𝑇 whose
rows are the columns of A and whose columns are the rows of A. Examples:
𝑎 𝑏 𝑎 𝑐
A=[ ] then 𝐴𝑇 = [ ]
𝑐 𝑑 𝑏 𝑑
0 1
0 2 3 𝑇
A=[ ] then 𝐴 = [2 2 ]
1 2 −1
3 −1
Remarks:
(i) The transpose of a diagonal matrix is the same diagonal matrix. For
instance
2 0 0 2 0 0
A = [0 1 0] is a diagonal matrix. And 𝐴 = [0 1 0] A = 𝐴𝑇
𝑇
0 0 2 0 0 2
(ii) If the transpose of a square matrix A equals the square matrix, then A is a
symmetric matrix. For instance
−1 5 −3 −1 5 −3
A = [ 5 0 4 ] and we have 𝐴 = [ 5 0 4 ] A = 𝐴𝑇
𝑇
−3 4 9 −3 4 9
(iii) If we have a symmetric matrix A and A × A = A, then the matrix A is said to
be idempotent. All identity matrices are symmetric and idempotent. For
example:
1 0
A=[ ] is an identity matrix and 𝐴𝑇 = 𝐴 and equally A × A = A.
0 1
Take home:
1 2 2 1
1) If A = [ ], B = [ ] find (AB)𝑇 and find 𝐴𝑇 𝐵𝑇
2 4 3 2
3 1
8 0 5
2) A = [2 4] B = [ ] find 𝐴𝑇 𝐵𝑇
3 2 1
7 4
- DETERMINANT OF A MATRIX
It is a scalar obtained from the elements of a matrix by a specified operations. The
determinant is specified only for square matrices.
(i)For a 2×2 matrix
𝑎11 𝑎12
A = [𝑎 𝑎 ] the determinant of A denoted |𝐴| or det(A) or 𝐴𝑑𝑒𝑡
21 22
|𝐴| = 𝑎11 𝑎22 − 𝑎21 𝑎12
8 9
Example: A = [ ] |𝐴| = 8 × 5 − 2 × 9
2 5
4
(ii)For a 3×3 matrix
Here we have basically two methods: Artistic method and the Co-factor/Laplace
method.
Artistic method:
𝑎1 𝑎2 𝑎3
Given A= [𝑏1 𝑏2 𝑏3 ]
𝑐1 𝑐2 𝑐3
This method follows 4 steps:
- Rewrite the first two columns of the matrix to the right of the original matrix;
- Locate the elements of the three primary diagonal P1, P2 and P3 and those of
the secondary diagonal S1, S2 and S3; and
- Multiply the elements of each primary and each secondary diagonal.
- The determinant equals the sum of the products for these 3 primary
diagonals minus the sum of the products for the 3 secondary diagonals.
P1 P2 P3
𝑎1 𝑎2 𝑎3 𝑎1 𝑎2
𝑏1 𝑏2 𝑏3 𝑏1 𝑏2
𝑐1 𝑐2 𝑐3 𝑐1 𝑐2
S1 S2 S3
Example:
3 1 2
A= [−1 2 4] determine det(A)
3 −2 1
Solution:
P1 P2 P3
3 1 2 3 1
−1 2 4 −1 2
3 −2 1 3 −2
S1 S2 S3
Take home:
5
2 3 1 1 1 8
Find the determinants of A= [4 3 8] ⇒ 𝑑𝑒𝑡𝐴 = −33 and B= [0 7 6]
5 7 9 2 6 4
⇒ 𝑑𝑒𝑡𝐵 = −108 using the artistic method.
Co-factor method
For any square matrix A, we can find a matrix of cofactors (Ac). To determine the
cofactor Cij of element 𝑎𝑖𝑗 𝑜𝑓 a matrix, we can either use simple mental reasoning or
a pencil to cross off row 𝑖 and column 𝑗 in the original matrix. Then focus on the
remaining elements that form a sub-matrix of the original matrix. Then look for the
determinant of the sub-matrix which is referred to as the minor of element 𝑎𝑖𝑗 .
The cofactor is then gotten by multiplying the minor by either positive one (+1) or
negative (-1) depending on the position of the element 𝑎𝑖𝑗 , that is (−1)𝑖+𝑗 × 𝑚𝑖𝑛𝑜𝑟.
Thus
𝒄𝒐𝒇𝒂𝒄𝒕𝒐𝒓 𝒄𝒊𝒋 = (−𝟏)𝒊+𝒋 × 𝒎𝒊𝒏𝒐𝒓
𝑎1 𝑎2 𝑎3
Given A= [𝑏1 𝑏2 𝑏3 ]
𝑐1 𝑐2 𝑐3
To calculate the determinant we choose a row. Suppose we choose row one. Then
𝑏 𝑏3 𝑏 𝑏3 𝑏 𝑏2
|𝐴| = 𝑎1 (−1)1+1 | 2 | + 𝑎2 (−1)1+2 | 1 | + 𝑎3 (−1)1+3 | 1 |
𝑐2 𝑐3 𝑐1 𝑐3 𝑐1 𝑐2
Example:
3 1 2
A= [−1 2 4] determine det(A) using the co-factor method.
3 −2 1
Solution:
Determinant with respect to the first row is given by:
6
1 2 0
B= [ 1 0 −1] find the det(A) using the artistic and the co-factor methods.
−1 3 2
- Properties of a determinant
1) If two rows or columns are interchanged a matrix will retain absolute value of
the determinant but it will change its sign.
𝑎1 𝑎2 𝑎3 𝑏1 𝑏2 𝑏3
𝑑𝑒𝑡 [𝑏1 𝑏2 𝑏3 ] = −𝑑𝑒𝑡 [𝑎1 𝑎2 𝑎3 ]
𝑐1 𝑐2 𝑐3 𝑐1 𝑐2 𝑐3
2) If rows are changed into columns and columns into rows then the
determinant will remain unchanged. Thus the determinant of a matrix equals
the determinant of its transpose.
𝑎1 𝑎2 𝑎3 𝑎1 𝑏1 𝑐1
𝑑𝑒𝑡 [𝑏1 𝑏2 𝑏3 ] = 𝑑𝑒𝑡 [𝑎2 𝑏2 𝑐2 ]
𝑐1 𝑐2 𝑐3 𝑎3 𝑏3 𝑐3
3) If two rows or columns are identical in a matrix then the determinant is zero.
𝑎1 𝑎2 𝑎3
𝑑𝑒𝑡 [𝑎1 𝑎2 𝑎3 ]=0
𝑐1 𝑐2 𝑐3
2 3 4
𝑒𝑥𝑎𝑚𝑝𝑙𝑒 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒: 𝑑𝑒𝑡 [2 3 4]
1 4 5
4) If any row or column of a matrix is multiplied by a constant, k, the
determinant obtained is k times the original determinant.
𝑎1 𝑎2 𝑎3 𝑎1 𝑎2 𝑎3
𝑑𝑒𝑡 [𝑘 𝑏1 𝑘𝑏2 𝑘𝑏3 ] = 𝑘 × 𝑑𝑒𝑡 [𝑏1 𝑏2 𝑏3 ]
𝑐1 𝑐2 𝑐3 𝑐1 𝑐2 𝑐3
7
4 6
If we now multiply the first row by 2, we have [ ], whose determinant is given
1 4
by:
(4 × 4) − (1 × 6) = 10 =2|𝐵|
2 3 2 + 2(1) 3 + 2(4)
𝑑𝑒𝑡 [ ] = 𝑑𝑒𝑡 [ ]=5
1 4 1 4
6) If any row or column is the sum of two or more elements then the
determinant can be expressed as a sum of two or more determinants.
𝑎1 + 𝑘1 𝑎2 + 𝑘2 𝑎3 + 𝑘3 𝑎1 𝑎2 𝑎3 𝑘1 𝑘2 𝑘3
| 𝑏1 𝑏2 𝑏3 | = |𝑏1 𝑏2 𝑏3 | + |𝑏1 𝑏2 𝑏3 |
𝑐1 𝑐2 𝑐3 𝑐1 𝑐2 𝑐3 𝑐1 𝑐2 𝑐3
- INVERSE OF A MATRIX
If for an nxn matrix, A, there is another nxn matrix, B, such that their product is the
identity matrix of order nxn.
8
𝑎11 𝑎12
𝐴 = [𝑎 𝑎22 ]
21
1 𝑎22 −𝑎12
𝐴−1 = [ 𝑎11 ]
|𝐴| −𝑎21
Illustration
2 3
𝐵=[ ]
1 4
1 4 −3
𝐵−1 = [ ]
5 −1 2
4/5 −3/5
𝐵−1 = [ ]
−1/5 2/5
9
|𝐴| = (1 × 3) + (2 × −1) + (0 × 3) = 1
Note: The transpose of a matrix is obtained by changing rows into columns and
columns into rows (transpose).
𝐴 𝐵 𝐶 𝐴 𝐷 𝐺
The adjoint of matrix [𝐷 𝐸 𝐹 ] is written as [𝐵 𝐸 𝐻]
𝐺 𝐻 𝐼 𝐶 𝐹 𝐼
With our example, the adjoint matrix is given by:
3 −4 −2
𝐴𝑎 = [−1 2 1]
3 −5 −2
3) The inverse of the matrix
3 −4 −2
−1 1
In our case, 𝐴 = [−1 2 1]
1
3 −5 −2
NB: EXCEL can be used to get the determinant and the inverse of a matrix
C) APPLICATIONS OF MATRICES
-Solving simultaneous equations
- Markov processes
10