Diagonal Matrix
A diagonal matrix is a matrix whose values outside of it's diagonal are set to zero. In matrix form, a diagonal matrix can look like below:
$$ A = \begin{pmatrix} 1 & 0 \\ 0 & 2 \end{pmatrix} $$
$$ B = \begin{pmatrix} 1 & 0 & 0 \\ 0 & 3 & 0 \\ 0 & 0 & 7 \end{pmatrix} $$
$$ C = \begin{pmatrix} 1 & 0 & 0 \\ 0 & 3 & 0 \end{pmatrix}$$
Implementation in Numpy
To create a diagonal matrix, first create a vector that will become the diagonal. Then use the method diag to generate the matrix
import numpy as np
diagonal = np.array([1, 3, 7])
np.diag(diagonal)