A Survey of Probability Concepts 159

c. Are the events “select a store with a deli” and “select a store with a pharmacy” mutu-
ally exclusive?
d. What is the name given to the event of “selecting a store with a pharmacy, a floral
shop, and a deli?”
e. What is the probability of selecting a store that does not have all three departments?
22. A study by the National Park Service revealed that 50 percent of vacationers going
to the Rocky Mountain region visit Yellowstone Park, 40 percent visit the Tetons, and
35 percent visit both.
a. What is the probability a vacationer will visit at least one of these attractions?
b. What is the probability .35 called?
c. Are the events mutually exclusive? Explain.

Rules of Multiplication
When we used the rules of addition in the previous section, we found the likelihood
of combining two events. In this section, we find the likelihood that two events both
happen. For example, a marketing firm may want to estimate the likelihood that a
person is 21 years old or older and buys a Hummer. Venn diagrams illustrate this as
the intersection of two events. To find the likelihood of two events happening we
use the rules of multiplication. There are two rules of multiplication, the special rule
and the general rule.

Special Rule of Multiplication The special rule of multiplication requires that

two events A and B are independent. Two events are independent if the occurrence
of one event does not alter the probability of the occurrence of the other event.

INDEPENDENCE The occurrence of one event has no effect on the probability of

the occurrence of another event.

One way to think about independence is to assume that events A and B occur
at different times. For example, when event B occurs after event A occurs, does A
have any effect on the likelihood that event B occurs? If the answer is no, then A
and B are independent events. To illustrate independence, suppose two coins are
tossed. The outcome of a coin toss (head or tail) is unaffected by the outcome of any
other prior coin toss (head or tail).
For two independent events A and B, the probability that A and B will both occur
is found by multiplying the two probabilities. This is the special rule of multiplication
and is written symbolically as:

LO5 Calculate SPECIAL RULE OF MULTIPLICATION P(A and B) P(A)P(B) [5–5]

probabilities using the
rules of multiplication.
For three independent events, A, B, and C, the special rule of multiplication
used to determine the probability that all three events will occur is:
P(A and B and C) P(A)P(B)P(C)

Example A survey by the American Automobile Association (AAA) revealed 60 percent of its
members made airline reservations last year. Two members are selected at random.
What is the probability both made airline reservations last year?

Solution The probability the first member made an airline reservation last year is .60, written
P(R1) .60, where R1 refers to the fact that the first member made a reservation.
160 Chapter 5

The probability that the second member selected made a reservation is also .60, so
P(R2) .60. Since the number of AAA members is very large, you may assume that
R1 and R2 are independent. Consequently, using formula (5–5), the probability they
both make a reservation is .36, found by:
P(R1 and R2) P(R1)P(R2) (.60)(.60) .36
All possible outcomes can be shown as follows. R means a reservation is made,
and NR means no reservation was made.
With the probabilities and the complement rule, we can compute the joint prob-
ability of each outcome. For example, the probability that neither member makes a
reservation is .16. Further, the probability of the first or the second member (spe-
cial addition rule) making a reservation is .48 (.24 .24). You can also observe that
the outcomes are mutually exclusive and collectively exhaustive. Therefore, the
probabilities sum to 1.00.

Outcomes Joint Probability

R1 R2 (.60)(.60) .36
R1 NR2 (.60)(.40) .24
NR1 R2 (.40)(.60) .24
NR1 NR2 (.40)(.40) .16
Total 1.00

Self-Review 5–5 From experience, Teton Tire knows the probability is .95 that a particular XB-70 tire will
last 60,000 miles before it becomes bald or fails. An adjustment is made on any tire that
does not last 60,000 miles. You purchase four XB-70s. What is the probability all four tires
will last at least 60,000 miles?

General Rule of Multiplication If two events are not independent, they are
referred to as dependent. To illustrate dependency, suppose there are 10 cans of
soda in a cooler, 7 are regular and 3 are diet. A can is selected from the cooler.
The probability of selecting a can of diet soda is 3/10, and the probability of
selecting a can of regular soda is 7/10. Then a second can is selected from the
cooler, without returning the first. The probability the second is diet depends on
whether the first one selected was diet or not. The probability that the second is
diet is:

2/9, if the first can is diet. (Only two cans of diet soda remain in the cooler.)
3/9, if the first can selected is regular. (All three diet sodas are still in the
cooler.)

The fraction 2/9 (or 3/9) is aptly called a conditional probability because its value
is conditional on (dependent on) whether a diet or regular soda was the first selec-
tion from the cooler.

LO6 Define the term CONDITIONAL PROBABILITY The probability of a particular event occurring, given
conditional probability. that another event has occurred.
 A Survey of Probability Concepts 161

We use the general rule of multiplication to find the joint probability of two events when
the events are not independent. For example, when event B occurs after event A
occurs, and A has an effect on the likelihood that event B occurs, then A and B are
not independent.
The general rule of multiplication states that for two events, A and B, the joint
probability that both events will happen is found by multiplying the probability that
event A will happen by the conditional probability of event B occurring given that
A has occurred. Symbolically, the joint probability, P(A and B), is found by:

GENERAL RULE OF MULTIPLICATION P(A and B) P(A)P(B ƒ A) [5–6]

Example A golfer has 12 golf shirts in his closet. Suppose 9 of these shirts are white and the
others blue. He gets dressed in the dark, so he just grabs a shirt and puts it on.
He plays golf two days in a row and does not do laundry. What is the likelihood
both shirts selected are white?

Solution The event that the first shirt selected is white is W1. The probability is P(W1)
because 9 of the 12 shirts are white. The event that the second shirt selected is
9/12

also white is identified as W2. The conditional probability that the second shirt
selected is white, given that the first shirt selected is also white, is P(W2 ƒW1) 8/11.
Why is this so? Because after the first shirt is selected there are only 11 shirts
remaining in the closet and 8 of these are white. To determine the probability of 2
white shirts being selected, we use formula (5–6).

9 8
P(W1 and W2) P(W1)P(W2 ƒ W1) a ba b .55
12 11

So the likelihood of selecting two shirts and finding them both to be white is .55.

Incidentally, it is assumed that this experiment was conducted without replacement.

That is, the first shirt was not laundered and put back in the closet before the sec-
ond was selected. So the outcome of the second event is conditional or dependent
on the outcome of the first event.
We can extend the general rule of multiplication to more than two events. For
three events A, B, and C, the formula is:

P(A and B and C) P(A)P(B ƒ A)P(C ƒ A and B)

In the case of the golf shirt example, the probability of selecting three white shirts
without replacement is:

9 8 7
P(W1 and W2 and W3) P(W1)P(W2 ƒ W1)P(W3 ƒ W1 and W2) a ba ba b .38
12 11 10

So the likelihood of selecting three shirts without replacement and all being white is .38.
162 Chapter 5

Self-Review 5–6 The board of directors of Tarbell Industries consists of eight men and four women. A four-
member search committee is to be chosen at random to conduct a nationwide search for
a new company president.
(a) What is the probability all four members of the search committee will be women?
(b) What is the probability all four members will be men?
(c) Does the sum of the probabilities for the events described in parts (a) and (b) equal 1?
Explain.

5.5 Contingency Tables

Often we tally the results of a survey in a two-way table and use the results of
this tally to determine various probabilities. We described this idea beginning on
page 126 in Chapter 4. To review, we refer to a two-way table as a contingency
Statistics in Action table.
In 2000 George W.
Bush won the U.S.
CONTINGENCY TABLE A table used to classify sample observations according to
presidency by the
slimmest of margins.
two or more identifiable characteristics.
Many election stories
resulted, some in-
A contingency table is a cross-tabulation that simultaneously summarizes two vari-
volving voting irreg-
ables of interest and their relationship. The level of measurement can be nominal.
ularities, others
Below are several examples.
raising interesting
election questions. In • A survey of 150 adults classified each as to gender and the number of movies
a local Michigan elec- attended last month. Each respondent is classified according to two criteria—
tion, there was a tie be- the number of movies attended and gender.
tween two candidates
for an elected posi-
tion. To break the tie, Gender
the candidates drew a
Movies Attended Men Women Total
slip of paper from a
box that contained 0 20 40 60
two slips of paper, one 1 40 30 70
marked “Winner” 2 or more 10 10 20
and the other un- Total 70 80 150
marked. To determine
which candidate drew
first, election officials • The American Coffee Producers Association reports the following information
flipped a coin. The on age and the amount of coffee consumed in a month.
winner of the coin flip
also drew the winning
slip of paper. But was Coffee Consumption
the coin flip really
Age (Years) Low Moderate High Total
necessary? No, be-
cause the two events Under 30 36 32 24 92
are independent. 30 up to 40 18 30 27 75
Winning the coin flip 40 up to 50 10 24 20 54
did not alter the prob- 50 and over 26 24 29 79
ability of either candi- Total 90 110 100 300
date drawing the
winning slip of paper.
According to this table, each of the 300 respondents is classified according to two
criteria: (1) age and (2) the amount of coffee consumed.
 A Survey of Probability Concepts 163

LO7 Compute The following example shows how the rules of addition and multiplication are
probabilities using a used when we employ contingency tables.
contingency table.

Example A sample of executives were surveyed about loyalty to their company. One of the ques-
tions was, “If you were given an offer by another company equal to or slightly bet-
ter than your present position, would you remain with the company or take the other
position?” The responses of the 200 executives in the survey were cross-classified
with their length of service with the company. (See Table 5–1.)

TABLE 5–1 Loyalty of Executives and Length of Service with Company

Length of Service
Less than 1–5 6–10 More than
1 Year, Years, Years, 10 Years,
Loyalty B1 B2 B3 B4 Total
Would remain, A1 10 30 5 75 120
Would not remain, A2 25 15 10 30 80
35 45 15 105 200

What is the probability of randomly selecting an executive who is loyal to the com-
pany (would remain) and who has more than 10 years of service?

Solution Note that two events occur at the same time—the executive would remain with the
company, and he or she has more than 10 years of service.
1. Event A1 happens if a randomly selected executive will remain with the company
despite an equal or slightly better offer from another company. To find the proba-
bility that event A1 will happen, refer to Table 5–1. Note there are 120 executives
out of the 200 in the survey who would remain with the company, so P(A1)
120/200, or .60.
2. Event B4 happens if a randomly selected executive has more than 10 years of ser-
vice with the company. Thus, P(B4 ƒ A1) is the conditional probability that an exec-
utive with more than 10 years of service would remain with the company despite
an equal or slightly better offer from another company. Referring to the contin-
gency table, Table 5–1, 75 of the 120 executives who would remain have more
than 10 years of service, so P(B4 ƒ A1) 75/120.
Solving for the probability that an executive randomly selected will be one who would
remain with the company and who has more than 10 years of service with the com-
pany, using the general rule of multiplication in formula (5–6), gives:
120 75 9,000
P(A1 and B4) P(A1)P(B4 ƒ A1) a ba b .375
200 120 24,000
To find the probability of selecting an executive who would remain with the com-
pany or has less than 1 year of experience, we use the general rule of addition, for-
mula (5–4).
1. Event A1 refers to executives that would remain with the company. So P(A1)
120/200 .60.
2. Event B1 refers to executives that have been with the company less than 1 year.
The probability of B1 is P(B1) 35/200 .175.
3. The events A1 and B1 are not mutually exclusive. That is, an executive can both
be willing to remain with the company and have less than 1 year of experience.
164 Chapter 5

We write this probability, which is called the joint probability, as P(A1 and B1).
There are 10 executives who would both stay with the company and have less
than 1 year of service, so P(A1 and B1) 10/200 .05. These 10 people are
in both groups, those who would remain with the company and those with less
than 1 year with the company. They are actually being counted twice, so we
need to subtract out this value.
4. We insert these values in formula (5–4) and the result is as follows.

P(A1 or B1) P(A1) P(B1) P(A1 and B1)

.60 .175 .05 .725

So the likelihood that a selected executive would either remain with the company
or has been with the company less than 1 year is .725.

Self-Review 5–7 Refer to Table 5–1 on page 163 to find the following probabilities.
(a) What is the probability of selecting an executive with more than 10 years of service?
(b) What is the probability of selecting an executive who would not remain with the com-
pany, given that he or she has more than 10 years of service?
(c) What is the probability of selecting an executive with more than 10 years of service
or one who would not remain with the company?

5.6 Tree Diagrams

The tree diagram is a graph that is helpful in organizing calculations that involve
several stages. Each segment in the tree is one stage of the problem. The branches
of a tree diagram are weighted by probabilities. We will use the data in Table 5–1
to show the construction of a tree diagram.
1. To construct a tree diagram, we begin by drawing a heavy dot on the left to
represent the root of the tree (see Chart 5–2).
2. For this problem, two main branches go out from the root, the upper one repre-
senting “would remain” and the lower one “would not remain.” Their probabilities
are written on the branches, namely, 120/200 and 80/200. These probabilities
could also be denoted P(A1) and P(A2).
3. Four branches “grow” out of each of the two main branches. These branches
represent the length of service—less than 1 year, 1–5 years, 6–10 years, and
more than 10 years. The conditional probabilities for the upper branch of the
tree, 10/120, 30/120, 5/120, and so on are written on the appropriate branches.
These are P(B1 ƒ A1), P(B2 ƒ A1), P(B3 ƒ A1), and P(B4 ƒ A1), where B1 refers to less than
1 year of service, B2 1 to 5 years, B3 6 to 10 years, and B4 more than 10 years.
Next, write the conditional probabilities for the lower branch.
4. Finally, joint probabilities, that the events A1 and Bi or the events A2 and Bi will
occur together, are shown on the right side. For example, the joint probability
of randomly selecting an executive who would remain with the company and
who has less than 1 year of service, from formula (5–6), is:
120 10
P(A1 and B1) P(A1)P(B1 ƒ A1) a ba b .05
200 120
Because the joint probabilities represent all possible outcomes (would
remain, 6–10 years service; would not remain, more than 10 years of service;
etc.), they must sum to 1.00 (see Chart 5–2).
 A Survey of Probability Concepts 165

Loyalty Service

Conditional Joint
probabilities probabilities

10
____ 120
Less than 1 year ____ 10
____ .050
120 200 120

30
____ 120 30
120 1–5 years ____ ____ .150
200 120
Would
remain
5 6–10 years 120
____ 5
____ .025
____ 200 120
120
120
____
200
75
____ Over 10 years 120
____ 75
____ .375
120 200 120

25
___ 80
Less than 1 year ____ 25
___ .125
80 80 200 80
____
200
15
___ 80 15
80 1–5 years ____ ___ .075
200 80
Would not
remain
10 6–10 years 80
____ 10
___ .050
___ 200 80
80

30
___ Over 10 years 80
____ 30
___ .150
80 200 80

Must total 1.00 1.000

CHART 5–2 Tree Diagram Showing Loyalty and Length of Service

Self-Review 5–8 Consumers were surveyed on the relative number of visits to a Sears store (often, occa-
sional, and never) and if the store was located in an enclosed mall (yes and no). When
variables are measured nominally, such as these data, the results are usually summarized
in a contingency table.

Enclosed Mall
Visits Yes No Total
Often 60 20 80
Occasional 25 35 60
Never 5 50 55
90 105 195

(a) Are the number of visits and enclosed mall variables independent? Why? Interpret your
conclusion.
(b) Draw a tree diagram and determine the joint probabilities.