C01120: Mathematical Economics

Chapter 1: Matrices
Chapter 2: Mathematics of Finance
Chapter 3: Differentials and Integrals in R
Chapter 4: Differentials in Rn

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 1 / 18
C01120: Mathematical Economics
Chapter 1: Matrices
Chapter 2: Mathematics of Finance
Chapter 3: Differentials and Integrals in R
Chapter 4: Differentials in Rn

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 1 / 18
C01120: Mathematical Economics
Chapter 1: Matrices
Chapter 2: Mathematics of Finance
Chapter 3: Differentials and Integrals in R
Chapter 4: Differentials in Rn

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 1 / 18
C01120: Mathematical Economics
Chapter 1: Matrices
Chapter 2: Mathematics of Finance
Chapter 3: Differentials and Integrals in R
Chapter 4: Differentials in Rn

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 1 / 18
References

Ronald J. Harshbarger, James J. Reynolds, Mathematical

Applications for the Management, Life, and Social Sciences, 12
ed., Cengage Learning, [2019].

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 2 / 18
Discussion
We begin with the following questions:

1 What is Economics?

2 Why should we study Mathematical Economics?

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 3 / 18
Discussion
We begin with the following questions:

1 What is Economics?

2 Why should we study Mathematical Economics?

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 3 / 18
Chapter 1: Matrices

1 Matrices and Operations with matrices (C)

2 Gauss-Jordan Elimination: Solving Systems of Equations

3 Inverse of a Square Matrix

4 Determinant of a Matrix

5 Applications of Matrices: Leontief Input-Output Models

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1.1 Matrices and Operations with matrices

Example 1
Two Vietnamese restaurants A and B in France serve 3 specialities:
Bun Bo, Pho and Hu Tieu. The following data provide the number of
bowls sold by these restaurants.

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1.1 Matrices and Operations with matrices

Example 1
Thus the previous data can be stored in 2 matrices A and B as follows
   
35 30 40 45 50 60
A= , B =  
40 50 45 50 45 55

To find the total bowls sold by 2 restaurants, we just take A + B, the

sum of 2 matrices.

Similarly, we can define A − B.

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 6 / 18
1.1 Matrices and Operations with matrices

Example 2
Two Vietnamese restaurants A and B in France serve 3 specialities:
Bun Bo, Pho and Hu Tieu with the price in euros usually as follows

However in this month, the increase of ingredients cost makes the

price of each speciality of both restaurants higher 10% than usual.

Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 7 / 18
1.1 Matrices and Operations with matrices

Example 2
Let P be the usual price matrix
 
15 12 10
P=  .
14 15 11

Then the price matrix of this month is

 
16.5 13.2 11
Pm = 1.1P =  .
15.4 16.5 12.1

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1.1 Matrices and Operations with matrices

The matrix M below has 3 rows and 4 columns → M is called a 3 × 4

matrix.

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1.1 Matrices and Operations with matrices
In general, if the matrix A has m rows and n columns → A is called a
m × n matrix.

The numbers in a matrix are called its elements. For example, a13
represents the element in the first row and the third column.

If m = n then A is called a square matrix.

When the columns and rows of matrix A are interchanged to create a

matrix B, then B is the transpose of A and we write AT = B.
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1.1 Matrices and Operations with matrices
Example 3
Consider
 
1 2 3  



 1 3 5
 4
A= 5 6  B =
and  .

  2 4 6
7 8 9

Then A is a square matrix of order 3, B is a 2 × 3 matrix, a12 = 2 and

b22 = 4. In addition
   
1 4 7 1 2
   
T T
   
A =  2 5 8  and B =  3 4 
  
.
   
3 6 9 5 6
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1.1 Matrices and Operations with matrices
Sum of 2 matrices
If A = (aij )m×n , B = (bij )m×n then C = A + B = (cij )m×n where

Similarly, we can define A − B, the difference of 2 matrices. In addition,

cA = (caij )m×n , where c is a real number.
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1.1 Matrices and Operations with matrices

Example 4
Let    
1 2 3 1 3 5
   
   
 4
A= 5  2
6  and B =  4 6 
.

   
7 8 9 3 6 9
Find A + B, A − B, 2A and −B.

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1.1 Matrices and Operations with matrices

Example 5
A Vietnamese restaurant in USA serves 3 specialities: Bun Bo, Pho
and Hu Tieu with the price of each bowl 15$, 14$ and 11$ respectively.
The following data provide the number of bowls sold in 2 days.

Find the revenue of the restaurant in each of 2 days.

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1.1 Matrices and Operations with matrices

Product of Two Matrices

Let A = (aij )m×n and B = (bij )n×p . The matrix product AB is a matrix
C = (cij )m×p where

cij = ai1 b1j + ai2 b2j + . . . + ain bnj .

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1.1 Matrices and Operations with matrices

Example 5
Find AB and BA if
   
3 2 1 2
A=  and B =  .
1 0 3 1

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1.1 Matrices and Operations with matrices
Exercise
Find c13 if C = AB where
 
  1 0 2
1 2 0 



A=  and B =  3 1 1 
  . Then calculate AB.
2 5 1  
2 4 3

Identity Matrix
An n × n matrix that has 1s down its diagonal and 0s everywhere else
is called an identity matrix. For example, the matrix
 
1 0
I=  is a 2 × 2 identity matrix.
0 1
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1.1 Matrices and Operations with matrices
Exercise
Find c13 if C = AB where
 
  1 0 2
1 2 0 



A=  and B =  3 1 1 
  . Then calculate AB.
2 5 1  
2 4 3

Identity Matrix
An n × n matrix that has 1s down its diagonal and 0s everywhere else
is called an identity matrix. For example, the matrix
 
1 0
I=  is a 2 × 2 identity matrix.
0 1
Le Ba Khiet, Phd. Faculty of Mathematics & Statistics, TDTU October 16, 2022 17 / 18
1.1 Matrices and Operations with matrices

Some Properties
Let be given some matrices A, B, C. We have
1. A + B = B + A
2. (A + B) + C = A + (B + C)
3. (A + B)T = AT + B T
4. A(B + C) = AB + AC
5. (AB)C = A(BC)
6. AB 6= BA
7. (AB)T = B T AT
8. AI = IA = A where I denotes the identity matrix.

Exercises
Page 200: 3, 4, 9, 10, 17, 21–24, 46, 50 . . .

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1.1 Matrices and Operations with matrices

Some Properties
Let be given some matrices A, B, C. We have
1. A + B = B + A
2. (A + B) + C = A + (B + C)
3. (A + B)T = AT + B T
4. A(B + C) = AB + AC
5. (AB)C = A(BC)
6. AB 6= BA
7. (AB)T = B T AT
8. AI = IA = A where I denotes the identity matrix.

Exercises
Page 200: 3, 4, 9, 10, 17, 21–24, 46, 50 . . .

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