Introduction
A basic understanding
of algebra is required in most introductory economics courses. In the
course of your studies, you will need to perform fundamental operations
including how to write a verbal statement as an algebraic equation, how
to express averages, how to handle non-parenthetic and parenthetic expressions,
how to use signed numbers correctly, and how to solve for an unknown variable
in algebraic equations. Reviewing and understanding the ten basic algebraic
rules that follow will help you to be better prepared to tackle any mathematical
situations you encounter. The self-test comprises twenty-five questions
that will test your understanding of these rules and can help you identify
areas of difficulty. Their complexity increases, so allow a little more
time for the final ones. Correct answers are provided along with tutorial-type
solutions.
Basic Algebraic
Rules
1.
The negative of a negative value is positive.
Example: -(-b)
= b
(You can put in a number, say 3, for "b," if you prefer to use numbers
rather than variables.)
What is really
going on is that the negative sign in front of (-b) is really -1. So another
way to think of the rule is:
2.
Multiplication of a negative value by a negative value returns a positive
value.
Example: (-a)
* (-b) = a * b.
(Here again, if you
prefer, you can put in numbers for a and b. If a = 1 and b = 3, then (-1)
* -3 = 3.)
3.
Multiplication of a negative value by a positive value returns a negative
value.
Example: (-a)
* (b)=-a * b.
(Here again, if you
prefer, you can put in numbers for a and b. If a = 4 and b = 3, then (-4)
* 3 = -12.)
4.
When moving variables in an equation from one side of the "=" sign to
the other, the sign of the variable will change. If the variable was positive,
it will now have a negative sign in front of it. If the variable was negative,
it will now have a positive sign in front of it.
Example: Y =
a - b * X
This can also be
written as:
Y - a = b * X
In the example above, "a" was eliminated from the right-hand side of the
equation by effectively subtracting it from each side of the equation
(as long as you do the same thing to both sides of the equation, its meaning
is not altered). That is:
Y - a = a + b - X - a.
Since a - a = 0, the "a" on the right hand side of the equation is eliminated.
Other ways in which the equation Y = a - b * X can be written are:
Y + b * X = a
Y - a + b * X = 0.
5.
A variable multiplied by its reciprocal equals 1.
Example: J *
(1/J) = 1.
6.
If two variables are multiplied by each other, separating them requires
division.
Example: Y *
Z = H
This can also be
written as:
Y = H/Z.
In the example above, Z is effectively eliminated from the left hand side
of the equation by dividing the left and right-hand side of the equation
through by Z. (As long as you do the same thing to both sides of the equation,
its meaning is not altered.) Since Z/Z = 1, Z is eliminated from the left-hand
side of the equation.
7.
Division by a variable is equivalent to multiplying by the reciprocal
of the variable.
In the example to
rule 4 above, Z was eliminated on the left-hand side of the equation by
dividing through each side of the equation by Z. You can also think of
this as multiplying each side of the equation by 1/Z. (As long as you
do the same thing to both sides of the equation, its meaning is not altered.)
That is:
1/Z * Y * Z = H * (1/Z)
Since 1/Z * Z = 1, the equation becomes Y = H/Z.
8.
When a set of variables is multiplied (or divided) by a common variable,
the common variable can be factored out.
Example: Z -
d * Z + h * Z
This can also be written as: Z * (1 - d + h)
Where Z is the common variable.
Example: k/q - d/q + h/q
This can also be written as: (1/q) * (k - d + h) Where 1/q is the common
variable.
9.
When given two equations with a common variable, substitutions can be
made.
Example: Y =
a + b * X and X = z - v * U
You may substitute
for X from the second equation into the first equation to get:
Y = a + b * (z - v * U)
Y = a + b * z - b * v * U
Factoring the "b" out of the two last terms on the right-hand side of
the equation yields:
Y = a + b * (z - v * U)
10.
Variables that appear on both sides an equation should be moved to the
same side where factoring can be done.
Example: Y =
a + b * z - b * v * Y
The common variable
is Y. By moving the Y term on the right-hand side (along with any variables
that it is multiplied or divided by) to the left-hand side (see rule #2
above), the equation becomes:
Y + b * v * Y = a + b * z
Factoring out the "Y" on the left-hand side (see rule #8 above) gives:
Y * (1 + b * v) = a + b * z.
The term (1 +b * v) can be eliminated from the left-hand side of the equation
by dividing through both sides by (1 +b * v). (See rule #6 above). This
yields a "solution" for Y as:
Y = [a + b * z]/[1 + b * v]
Self-Test
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