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    Econ 115 D - Probset 1

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    zhess 4096
    This document contains a problem set from an economics course. It includes 7 problems involving matrices, quadratic forms, eigenvalues, linear regression, and input-output analysis. Problem 6 asks students to perform a linear regression on GDP and consumption data, find the line of best fit, and plot it along with the original scatter plot. Problem 7 provides an input-output table and asks what the change in sector outputs would be if final demand for services increases by 10%.

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    Econ 115 D - Probset 1

    Uploaded by

    zhess 4096
    9 views3 pages
    This document contains a problem set from an economics course. It includes 7 problems involving matrices, quadratic forms, eigenvalues, linear regression, and input-output analysis. Problem 6 asks students to perform a linear regression on GDP and consumption data, find the line of best fit, and plot it along with the original scatter plot. Problem 7 provides an input-output table and asks what the change in sector outputs would be if final demand for services increases by 10%.

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    Ateneo economics mathematics

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    This document contains a problem set from an economics course. It includes 7 problems involving matrices, quadratic forms, eigenvalues, linear regression, and input-output analysis. Problem 6 asks students to perform a linear regression on GDP and consumption data, find the line of best fit, and plot it along with the original scatter plot. Problem 7 provides an input-output table and asks what the change in sector outputs would be if final demand for services increases by 10%.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views3 pages

    Econ 115 D - Probset 1

    Uploaded by

    zhess 4096
    This document contains a problem set from an economics course. It includes 7 problems involving matrices, quadratic forms, eigenvalues, linear regression, and input-output analysis. Problem 6 asks students to perform a linear regression on GDP and consumption data, find the line of best fit, and plot it along with the original scatter plot. Problem 7 provides an input-output table and asks what the change in sector outputs would be if final demand for services increases by 10%.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Ateneo de Manila University

    Loyola Schools
    Economics 115

    Problem Set 1

    Answer all items. Show complete solutions.


     
    a11 0 0 0
     0 a22 0 0
    1. Let A =  , where aij ∈ R \ {0} for i, j = 1, 2, 3, 4.
    0 0 a33 0 
    0 0 0 a44

    (a) Show that A is nonsingular.

    (b) Find the inverse of A.

    2. Find the real symmetric matrix that generates the quadratic form

    q(x) = 3x21 + 2x22 + x23 − 2x1 x2 − 2x2 x3

     
    1 4
    3. Find the eigenvalues of A = . Give at least one eigenvector for each of the
    3 5
    eigenvalues.
     
    1 0 1 1 1
    1 2 3 4 5 
     
    4. Find α such that A =   2 0 1 2 1  is nonsingular.

    0 0 0 1 0 
    1 0 1 3 α
     
    1 2 1 0
    3 2 0 5
    5. Let A = 4 7 1 5. Determine if A is nonsingular. If so, find the elements of its

    0 3 3 1
    inverse with indices (4, 2) and (3, 3).

    6. Suppose we want to find a linear function that fits or approximates a set of data points
    {(x1 , y2 ), (x2 , y2 ), . . . , (xn , yn )}. If there exists such a function, then

    y1 = a + bx1
    y2 = a + bx2
    ..
    .
    yn = a + bxn

    To find the said linear function, we need to estimate the parameters a, b ∈ R. We can

    1
    express the system of equations above as
       
    y1 1 x1
     y2  1 x2   
     a
     ..  =  .. .. 
      
     .  . .  b
    yn 1 xn
    yn×1 = Xn×2 β2×1
    We solve for the parameters by reducing the n×2 matrix X to a 2×2 matrix as follows
    yn×1 = Xn×2 β2×1
    T T
    Xn×2 yn×1 = Xn×2 Xn×2 β2×1
    z2×1 = H2×2 β2×1
    where z = X T y, H = X T X. The solution is given by
    β = H −1 z (? ? ?)

    Consider the following data points. In Table 1, consumption is determined by the


    amount of income (GDP).

    Table 1: GDP and household consumption

    GDP Consumption
    44.3 33.4
    48.7 35.0
    47.3 34.6
    55.0 39.9
    44.5 34.2
    41.3 30.4
    42.0 32.1
    51.6 38.0
    43.6 34.0
    47.5 33.9

    (a) Make a scatter plot of Table 1 data points (GDP, Consumption).

    (b) Use (? ? ?) to find the line that represents the relationship between GDP and
    consumption spending.

    (c) Plot the line you obtain in (b) with the scatter plot in (a).

    7. Consider the following input-output table (Table 2).

    If final demand for services increases by 10 percent, what is the resulting change in
    output of economic sectors? (You may use MS Excel or any software to compute the
    Leontief inverse. Please attach your file to your answers.)

    2
    Table 2: 2012 Input-output table (in million Php)
    AGRI IND SER Intermediate Demand Final Demand
    AGRI 264,254 788,566 184,157 1,236,989 908,334
    IND 135,084 2,857,462 1,596,058 4588627 3,809,016
    SER 252,488 1,520,452 3,404,649 5,177,594 5,957,470
    Total Intermediate Consumption 651,826 5,166,511 5,184,869 11,003,208 10,674,814
    Compensation of Employees 632,709 762,772 2,363,099 3,758,582
    Consumption of Fixed Capital 114,081 309,358 519,588 943,029
    Taxes less Subsidies on Production 55,836 83,901 285,433 425,169
    Operating Surplus 690,866 2,075,096 2,782,071 5,548,033
    Total Primary Inputs 1,493,495 3,231,125 5,950,194 10,674,813
    Total Inputs 2,145,320 8,397,638 11,135,062 21,678,020

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