Chap 2-1

Concepts & Applications

Basic Probability
chap 2-2
Important Terms
Random Experiment a process leading to an
uncertain outcome
- A coin is thrown
- A consumer is asked which of two products he
or she prefers
- The daily change in an index of stock market
prices is observed
chap 2-3
3
Sample Space - Collection of all possible
outcomes
e.g.: All six faces of a die:



e.g.: All 52 cards
a deck of
bridge cards
Important Terms
chap 2-4
Event any subset of basic outcomes from the
sample space
Important Terms
Simple Event
Outcome With 1 Characteristic
Red card from a deck of bridge cards
Ace card from a deck of bridge cards

Joint Event
2 Events Occurring Simultaneously
A and B, (AB):
Red, ace card from a bridge deck
Male, over age 20

Important Terms
chap 2-6
Compound Event
One or Another Event Occurring
D or E, (DE):
Ace or Red card from bridge deck

Important Terms
chap 2-7
Important Terms
Intersection of Events If A and B are two
events in a sample space S, then the
intersection, A B, is the set of all outcomes in
S that belong to both A and B
(continued)
A B AB
S
chap 2-8
Important Terms
A and B are Mutually Exclusive Events if they
have no basic outcomes in common
i.e., the set A B is empty
(continued)
A
B
S
chap 2-9
Important Terms
Union of Events If A and B are two events in a
sample space S, then the union, A U B, is the
set of all outcomes in S that belong to either
A or B
(continued)
A B
The entire shaded
area represents
A U B
S
chap 2-10
Important Terms
Events E
1
, E
2
, E
k
are Collectively Exhaustive
events if E
1
U E
2
U . . . U E
k
= S
i.e., the events completely cover the sample space

The Complement of an event A is the set of all
basic outcomes in the sample space that do not
belong to A. The complement is denoted
(continued)
A
A
S
A
chap 2-11
Examples
Let the Sample Space be the collection of all
possible outcomes of rolling one die:


S = [1, 2, 3, 4, 5, 6]

Let A be the event Number rolled is even
Let B be the event Number rolled is at least 4
Then
A = [2, 4, 6] and B = [4, 5, 6]
chap 2-12
(continued)
Examples
S = [1, 2, 3, 4, 5, 6] A = [2, 4, 6] B = [4, 5, 6]
5] 3, [1, A =
6] [4, B A =
6] 5, 4, [2, B A =
S 6] 5, 4, 3, 2, [1, A A = =
Complements:

Intersections:

Unions:
[5] B A =
3] 2, [1, B =
chap 2-13
Mutually exclusive:
A and B are not mutually exclusive
The outcomes 4 and 6 are common to both

Collectively exhaustive:
A and B are not collectively exhaustive
A U B does not contain 1 or 3
(continued)
Examples
S = [1, 2, 3, 4, 5, 6] A = [2, 4, 6] B = [4, 5, 6]
chap 2-14
Probability
Probability the chance that
an uncertain event will occur
(always between 0 and 1)

0 P(A) 1 For any event A

Certain
Impossible
.5
1
0
chap 2-15
Assessing Probability
There are three approaches to assess the
probability of an uncertain event:

1. classical probability



Assumes all outcomes in the sample space are equally likely to
occur
space sample the in outcomes of number total
event the satisfy that outcomes of number
N
N
A event of y probabilit
A
= =
chap 2-16
Assessing Probability
Three approaches (continued)

2. relative frequency probability



the limit of the proportion of times that an event A occurs in a large
number of trials, n

3. subjective probability


an individual opinion or belief about the probability of occurrence


population the in events of number total
A event satisfy that population the in events of number
n
n
A event of y probabilit
A
= =
chap 2-17
Probability Postulates
1. If A is any event in the sample space S, then


2. Let A be an event in S, and let O
i
denote the basic
outcomes. Then



(the notation means that the summation is over all the basic outcomes in A)

3. P(S) = 1
1 P(A) 0 s s
) P(O P(A)
A
i
=
chap 2-18
Probability Rules
The Complement rule:



The Addition rule:
The probability of the union of two events is




1 ) A P( P(A) i.e., = + P(A) 1 ) A P( =
B) P(A P(B) P(A) B) P(A + =
chap 2-19
Addition Rule Example
Consider a standard deck of 52 cards, with four suits:

Let event A = card is an Ace
Let event B = card is from a red suit
Find P(A or B)?
chap 2-20
P(Red U Ace) = P(Red) + P(Ace) - P(Red Ace)
= 26/52 + 4/52 - 2/52 = 28/52
Dont count
the two red
aces twice!
Black
Color
Type
Red
Total
Ace 2 2 4
Non-Ace 24 24 48
Total 26 26 52
(continued)
Addition Rule Example
chap 2-21
Counting the Possible Outcomes
Use the Combinations formula to determine the
number of combinations of n things taken k at a
time



where
n! = n(n-1)(n-2)(1)
0! = 1 by definition

k)! (n k!
n!
C
n
k

=
chap 2-22
Example
The sample space contains 5 As and 7 Bs.
What is the probability that a randomly
selected set of 2 will include 1 A and 1 B?
Sol:
53 . 0
66
35
66
7 5
) 1 & 1 (
) 1 & 1 (
12
2
7
1
5
1
= =

=
B A P
C
C C
B A P
chap 2-23
Practice Questions
Q # 1: The sample space contains 6 red and 4 green marbles.
What is the probability that a randomly selected set of 3 will
include 1 Red & 2 Green marbles.
Ans: 36/120
Q # 2: ABC Inc. is hiring managers to till four key positions.
The candidates are five men and three women. Assuming that
every combination of men and women is equally likely to be
chosen, what is the probability that at least one woman will be
selected?
Ans: 13/14
Hint: A: at least one woman is selected
Use complement law
chap 2-24
A conditional probability is the probability of one
event, given that another event has occurred:
P(B)
B) P(A
B) | P(A

=
P(A)
B) P(A
A) | P(B

=
The conditional
probability of A given
that B has occurred
The conditional
probability of B given
that A has occurred
Conditional Probability
chap 2-25
What is the probability that a car has a CD
player, given that it has AC ?

i.e., we want to find P(CD | AC)
Conditional Probability Example
Of the cars on a used car lot, 70% have air
conditioning (AC) and 40% have a CD player
(CD). 20% of the cars have both.
chap 2-26
Conditional Probability Example
No CD CD Total
AC
.2 .5 .7
No AC .2 .1
.3
Total .4 .6 1.0
Of the cars on a used car lot, 70% have air conditioning
(AC) and 40% have a CD player (CD).
20% of the cars have both.
.2857
.7
.2
P(AC)
AC) P(CD
AC) | P(CD = =

=
(continued)
chap 2-27
Conditional Probability Example
No CD CD Total
AC
.2 .5 .7
No AC .2 .1
.3
Total .4 .6 1.0
Given AC, we only consider the top row (70% of the cars). Of these,
20% have a CD player. 20% of 70% is 28.57%.
.2857
.7
.2
P(AC)
AC) P(CD
AC) | P(CD = =

=
(continued)
chap 2-28
Multiplication Rule
Multiplication rule for two events A and B:



also
P(B) B) | P(A B) P(A =
P(A) A) | P(B B) P(A =
Question
chap 2-29
If a card is selected, at random, from a deck of 52

cards, what is the probability that the card is an ace

of red color?
chap 2-30
Multiplication Rule Example
P(Red Ace) = P(Red| Ace)P(Ace)

Black
Color
Type
Red
Total
Ace 2 2 4
Non-Ace 24 24 48
Total 26 26 52
52
2
52
4
4
2
=
|
.
|

\
|
|
.
|

\
|
=
52
2
cards of number total
ace and red are that cards of number
= =
chap 2-31
Statistical Independence
Two events are statistically independent
if and only if:


Events A and B are independent when the probability of one
event is not affected by the other event
If A and B are independent, then
P(A) B) | P(A =
P(B) P(A) B) P(A =
P(B) A) | P(B =
if P(B)>0
if P(A)>0
chap 2-32
Statistical Independence Example
No CD CD Total
AC
.2 .5 .7
No AC .2 .1
.3
Total .4 .6 1.0
Of the cars on a used car lot, 70% have air conditioning
(AC) and 40% have a CD player (CD).
20% of the cars have both.










Are the events AC and CD statistically independent?
Out of a target audience of 2,000,000, ad A reaches
500,000 viewers, B reaches 300,000 viewers and both
ads reach 100,000 viewers.
What is P(A | B)?
500, 000
( ) .25
2, 000, 000
P A = =
300, 000
( ) .15
2, 000, 000
P B = =
100, 000
( ) .05
2, 000, 000
P A B = =
Statistical Independence
Example: Television Ads
( ) .05
( | ) .30
( ) .15
P A B
P A B
P B

= = =
.3333 or 33%
So, P(ad A) = .25
P(ad B) = .15
P(A B) = .05
P(A | B) = .3333
P(A | B) = .3333 P(A) = .25
P(A)P(B)=(.25)(.15)=.0375 P(A B)=.05
Are events A and B independent?
Independent Events
Example: Television Ads
chap 2-35
Q:1 A single 6-sided die is rolled. What is the probability of
each outcome? What is the probability of rolling an even number?
of rolling an odd number?
Q:2 A single 6-sided die is rolled. What is the probability of
rolling a 2 or a 5?
Q:3 A glass jar contains 6 red, 5 green, 8 blue and 3 yellow
marbles. If a single marble is chosen at random from the jar, what
is the probability of choosing a red marble? a green marble? a
blue marble? a yellow marble?
Q:4 A glass jar contains 1 red, 3 green, 2 blue, and 4 yellow
marbles. If a single marble is chosen at random from the jar, what
is the probability that it is yellow or green?
Practice Questions
chap 2-36
Q:5 On New Year's Eve, the probability of a person having a
car accident is 0.09. The probability of a person driving while
intoxicated is 0.32 and probability of a person having a car
accident while intoxicated is 0.15. What is the probability of a
person driving while intoxicated or having a car accident?
Q:6 A single card is chosen at random from a standard deck of
52 playing cards. What is the probability of choosing a card that
is not a king?
Q:7 A card is chosen at random from a deck of 52 cards. It is
then replaced and a second card is chosen. What is the probability
of choosing a jack and an eight?
Practice Questions
Q # 8: A hamburger chain found that 75% of all customers use
mustard, 80% use ketchup, and 65% use both.

a. What is the probability that a customer will use at least one
of these? (0.90)

b. What is the probability that a ketchup user uses mustard?
(0.8125)

Q # 9: The probability of A is 0.70 and the probability of B is
0.80 and the probability of both is 0.50. What is the conditional
probability of A given B? Are A and B statistically independent?
Practice Questions
chap 2-38
Practice Questions
Q # 10: (a) A fair die is rolled twice. Let A be the event of an odd
total and B the event of an ace on the first die. Verify that P(A/B)
= P(A)
(b) The probability that a man will be alive in 25 years is 3/5 and
that his wife will be alive in 25 years is 2/3. Find the probability
that (i) both will be alive (ii) At least one will be alive.

Q # 11: A music store owner finds that 25% of the
customers entering the store ask as assistant for help and 30% of
the customers make a purchase before leaving. It is also found that
20% of all customers both ask for assistance and make a purchase.
What is the probability that a customer does at least one of these
two things?

Q # 12: The accompanying table shows proportions of
adults categorized to whether they are readers or non-readers
of newspapers and whether or not they voted in the last
election.

Practice Questions
Voted Readers Non-readers
Yes 0.63 0.13
No 0.14 0.10
What is the probability that a randomly chosen adult from this
population who did not read newspaper did not vote?
(0.4348)
chap 2-40
Q # 13: In a certain college, 4% of the men and 1% of
the women are taller than 6 feet. Furthermore 60% of the
students are women. Now, if a student is selected at random
and is taller than 6 feet, what is the probability that the
student is a woman?
Practice Questions