Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations

EC115 Methods of Economic Analysis

Lecture 1 Linear Equations
Week 2, Autumn 2008
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Lecture Outline and Reading
1. Introduction to Linear Equations and Linear Functions
2. Graphing Linear Functions
3. Implicit Linear Functions
4. Simultaneous Linear Equations
Essential reading: Renshaw Chap. 3
Complementary reading: Jacques Chap. 1
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Terms and Concepts
An equation is any mathematical expression that contains an equals
sign.
An equation is said to be linear if NONE of the variables that appear in
it is raised to any power other than power 1.
For example:
y 3x + 2 = 0 (1)
3
4
x = 3 (2)
Examples of non-linear equations:
y
2
3x + 2 = 0 (3)
1
x
+ 2 = 0 (4)
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
An equation may contain one or more unknowns or variables and also
some given or known values, called constants, coecients or parameters.
For example:
y 3x = 2 (5)
contains two variables (x and y) and two coecients (3 and 2). Another
example is:
y ax + b = 0 (6)
which contains two variables and two parameters (a and b), but now the
parameters are not specied as numbers. This way of writing a linear
equation is more general, since the parameters of a and b can be any
number.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Solving a Linear Equation
Suppose we are given the equation
4x + 3 = 0. (7)
We can solve this equation algebraically using elementary mathematical
operations. The solution is the value of x that makes this equation true
(equal to zero). We rearrange the equation so as to isolate x to the
left-hand side of the equals sign. Hence, the solution is
x =
3
4
(8)
You can check this by substituting x =
3
4
into (7).
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Linear Functions
A linear function is a linear equation with at least two variables.
An expression such as
y = 3x 2 (9)
is an example of a linear function.
A linear function denes a linear relationship between the variables. The
relationship exists because as soon as a value is assigned to one of the
variables, the value of the other variable is determined.
In the expression (7) above, the value of the variable y is given by
3x 2. Thus, depending on the value of x we can get the corresponding
value for y that satises the linear function. If x = 2, then y = 4, while if
x = 1, we obtain y = 5.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
In general, a function between two variables can be written as
y = f (x) , (10)
where f denotes the relationship between the two variables, x and y.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Independent and Dependent Variables
Consider the equation (or function) in (9):
y = 3x 2 (11)
The variable that appears on the right-hand side of the equation (here x)
is conventionally called the independent variable, because it is free to
take any value we choose to assign to it.
The variable on the left-hand side of the equation (here y) is generally
called the dependent variable. This is because depending on the value of
x we can get the value of y.
We say that y is a function of x.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Inverse functions
Consider again the equation (or function) in (9):
y = 3x 2, (12)
where y is the dependent variable. This equation may be rearranged to
x =
2
3
+
1
3
y, (13)
where x is now the dependent variable. The relationship between x and y
is the same, in the sense that any pair of values of x and y that satises
one equation will automatically satisfy the other.
We say that y = 3x 2 and x =
2
3
+
1
3
y are inverse functions.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Graphs of Linear Functions
Consider again equation (or function) (9): y = 3x 2.
We can show the relationship between x and y by plotting the equation
on a graph. First nd at least two points (or coordinates) that satisfy the
equation.
Table: Values for graph of y = 3x 2
x y = 3x 2
-2 y = 3 (2) 2 = 8
-1 y = 3 (1) 2 = 5
0 y = 3 (0) 2 = 2
1 y = 3 (1) 2 = 1
2 y = 3 (2) 2 = 4
Note that (-2, -8) and (0, -2) are pairs of values for x and y that satisfy
the equation y = 3x 2. They are also points on the graph of
y = 3x 2, and are called the coordinates of those points. By
convention, the rst number in the brackets is always the x-coordinate
while the second number is the y-coordinate.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Figure: Graph of y = 3x 2
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
The Slope and the Intercept
1. The slope (or gradient) of a linear function: This is the measure
of how much y increases when we increase x by one unit.
We can either look at the function or the graph. Looking at function
y = 3x 2, we can see that y increases by 3 when we increase x by one
unit. Hence, 3 > 0 is the slope of this function, and the graph is upward
sloping (Check the graph).
2. The intercept of a linear function: The point where the graph of
the function cuts an axis.
Again this can be found either by looking at the graph or the function.
From y = 3x 2, setting x = 0, we obtain y = 2. This is the point
where the graph cuts the y-axis (the y-intercept). Similarly, we obtain the
x-intercept by setting y = 0 x =
2
3
. (Check the graph).
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
In general, a linear function y = ax + b (where a and b are any two
constants):
1. has a graph that is a straight line.
2. has a slope of a,
3. cuts the y-axis at y = b (the y-intercept), and x-axis at x =
b
a
(the x-intercept).
4. slopes upwards if a > 0 (the slope is positive), and slopes
downwards if a < 0 (the slope is negative). If a = 0, the graph is a
horizontal line.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Graphical Solution of Linear Equations
We already saw how to solve an equation algebraically. But we can also
nd the solution graphically. Suppose we are asked to solve the linear
equation 3x 2 = 0.
Refer back to previous slides where we plotted function y = 3x 2 on a
graph. We saw that the graph cuts the x-axis at the point where y = 0.
Substituting y = 0 into y = 3x 2 gives 3x 2 = 0.
Rearranging the equation, we nd that x =
2
3
. Hence, the value of x
which satises 3x 2 = 0 is also the point where the graph of
y = 3x 2 cuts the x-axis.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Implicit Linear Functions
Sometimes a linear function is presented as
4x 2y + 6 = 0 (14)
This is known as an implicit function because both x and y appear on
the same side of the equation. We cannot say which is the independent
and which the dependent variable.
If the implicit function is linear it is easy to transform it into the familiar
linear form, where y is on the left-hand side of the equation and x on the
right-hand side:
y = 2x 3 (15)
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
In general, given an implicit linear function:
Ax + By + C = 0, (16)
where A, B, and C are parameters (or constants). Rearranging the
equation into the explicit form
y =
A
B
x
C
B
. (17)
We can now see explicitly how y depends on x. The slope of the function
is
A
B
and the intercept with the y-axis is
C
B
.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Simultaneous Linear Equations or System of Equations
Suppose we are told that two variables, x and y are related to each other
by the linear function
y = 4x. (18)
We are also told that the variables are related to each other by
y = 2x + 6. (19)
Because (18) and (19) are true at the same time, they are called
simultaneous linear equations.
There are pairs of values of x and y that satisfy (18), e.g. x = 1, y = 4
or x = 0, y = 0 and others that satisfy (19), e.g., x = 1, y = 8 and
x = 0 and y = 6. But none of these pairs satises both equations.
However, the task here is to nd the pair (pairs) of values that satises
both equations at the same time.
This is why it is called solving simultaneous equations.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
From the previous slide, since y = 4x and y = 2x + 6, it must be that
4x = 2x + 6
Hence, x = 3. Substitute x = 3 into one of the equation to nd y. For
instance, y = 2(3) + 6 = 12. So x = 3, y = 12 is the solution. Check by
substituting these values to both equations:
12 = 4(3) (20)
12 = 2(3) + 6
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Methods of nding the solution
Consider now the simultaneous equations
y = 3x 5 (21)
4 + y
2
= x (22)
We cannot immediately proceed as before since neither the left-hand or
the right-hand sides are equal to one another. There are two methods to
overcome this problem.
Method 1. We manipulate the equations so that either the left-hand or
the right-hand sides are equal.
For the equations above, take
4+y
2
= x and solve it for y: Multiply both
sides by 2 to get 4 + y = 2x, then substract 4 from both sides to get
y = 2x 4.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
We are now ready to proceed as before:
3x 5 = 2x 4 (23)
x = 1
Substitute x = 1 into one of the equations in (21) to get y = 2. As a
nal check, substitute the solution values to both equations:
2 = 3(1) 5 (24)
2 = 2(1) 4
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Method 2. The substitution method. Here we replace one variable (y)
in one of the equations with the y in the other equation.
From above, substitute (21) into (22) to get:
4 + (3x 5)
2
= x (25)
Multiply both sides by 2, and rearrange the xs to the left-hand side and
constants to the right-hand side. Hence, x = 1. Substitute x = 1 into
one of the equations to obtain y = 2.
Note that we could also proceed by substituting for x between the
equations.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Graphical solution of simultaneous linear equations
Recall the pair of equations from above:
y = 4x. (26)
y = 2x + 6. (27)
Let us plot the graphs of these equations on the same axes. We can see
that the two graphs intersect at the point where x = 1, y = 2. These
values are the same we obtained when solving the system of equations.
The solution to a pair of simultaneous equations is given by the
coordinates of the point of intersection of their graphs.
This rule is valid for any pair of simultaneous equations, whether linear or
not.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Figure: Existence of a solution
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
What if the two graphs are parallel lines?
The graphs of y = 2x + 3 and y = 2x 3 have the same slope. They are
parallel to each other, so they never intersect. In this case, there is no
solution.
Figure: No solution
Check algebraically:
2x + 3 = 2x 2 (28)
3 = 2
The solution does not exist. We say that the equations are inconsistent.
Introduction Linear equations Linear Functions Graphing Linear Functions Implicit Linear Functions Simultaneous Linear Equations
Another way in which the solution may fail is if the two graphs have the
same slope and the same intercept, so that one lies on top of the other.
For example
y = 4x + 6 (29)
x =
1
4
y
3
2
(30)
If we substitute one into the other ((29) into (30)), we obtain
x =
1
4
(4x + 6)
3
2
, (31)
which becomes
x = x +
3
2

3
2
(32)
x = x
Any pair of values for x and y satises both equations. We say that the
equations are not independent.