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BASIC PROBABILITY

Learning Objectives

In this chapter, you learn:

Basic probability concepts and definitions Conditional probability Various counting rules

Important Terms

Probability – the chance that an uncertain event will

occur (always between 0 and 1) Event – Each possible outcome of a variable Sample Space – the collection of all possible events

Assessing Probability

There are three approaches to assessing the probability of

**an uncertain event: 1. a priori classical probability
**

probability of occurrence = X number of ways the event can occur = T total number of elementary outcomes

**2. empirical classical probability
**

probability of occurrence = number of favorable outcomes observed total number of outcomes observed

3. subjective probability

an individual judgment or opinion about the probability of occurrence

Sample Space

The Sample Space is the collection of all possible events e.g. All 6 faces of a die:

e.g. All 52 cards of a bridge deck:

Events

Simple event

An outcome from a sample space with one characteristic e.g., A red card from a deck of cards

Complement of an event A (denoted A’) All outcomes that are not part of event A e.g., All cards that are not diamonds Joint event

Involves two or more characteristics simultaneously e.g., An ace that is also red from a deck of cards

Visualizing Events

Contingency Tables

Ace Black Red Total 2 2 4

Ace

Not Ace 24 24 48 2 24 2

Ace

Total 26 26 52

Sample Space

Tree Diagrams

Sample Space

Full Deck of 52 Cards

ar ack C Bl

d

Not an Ace

Re d C

ard

Ace

No t a n

24

Visualizing Events

Venn Diagrams

Let A = aces Let B = red cards

A ∩ B = ace and red A

A U B = ace or red

B

**Mutually Exclusive Events
**

Mutually exclusive events

Events that cannot occur together

example:

A = queen of diamonds; B = queen of clubs

Events A and B are mutually exclusive

**Collectively Exhaustive Events
**

Collectively exhaustive events One of the events must occur The set of events covers the entire sample space

**example: A = aces; B = black cards; C = diamonds; D = hearts
**

Events A, B, C and D are collectively exhaustive (but not mutually exclusive – an ace may also be a heart) Events B, C and D are collectively exhaustive and also mutually exclusive

Probability

Probability is the numerical measure of the likelihood that

an event will occur inclusively

1

Certain

The probability of any event must be between 0 and 1,

0 ≤ P(A) ≤ 1 For any event A The sum of the probabilities of all mutually exclusive and 0.5 collectively exhaustive events is 1

P(A) + P(B) + P(C) = 1

If A, B, and C are mutually exclusive and collectively exhaustive

0

Impossible

**Computing Joint and Marginal Probabilities
**

The probability of a joint event, A and B:

**number of outcomes satisfying A and B P( A and B) = total number of elementary outcomes
**

Computing a marginal (or simple) probability:

1 2 Where B1, B2, …, Bk are k mutually exclusive and collectively exhaustive events

P(A) = P(A and B ) + P(A and B ) + + P(A and Bk )

**Joint Probability Example
**

P(Red and Ace)

= number of cards that are red and ace 2 = total number of cards 52

Type Ace Non-Ace Total

Color

Red Black

Total 4 48 52

2 24 26

2 24 26

**Marginal Probability Example
**

P(Ace)

= P( Ace and Re d) + P( Ace and Black ) = 2 2 4 + = 52 52 52

Type Ace Non-Ace Total

Color

Red Black

Total 4 48 52

2 24 26

2 24 26

Joint Probabilities Using Contingency Table

Event

Event

A1 A2 B1 B2

Total

P(A1)

P(A1 and B1) P(A1 and B2)

P(A2 and B1) P(A2 and B2) P(A2) P(B1) P(B2)

Total

1

Joint Probabilities

Marginal (Simple) Probabilities

**General Addition Rule
**

General Addition Rule: P(A or B) = P(A) + P(B) - P(A and B) If A and B are mutually exclusive, then P(A and B) = 0, so the rule can be simplified: P(A or B) = P(A) + P(B) For mutually exclusive events A and B

**General Addition Rule Example
**

P(Red or Ace) = P(Red) +P(Ace) - P(Red and Ace) = 26/52 + 4/52 - 2/52 = 28/52

Don’t count the two red aces twice!

Type Ace Non-Ace Total

Color

Red Black

Total 4 48 52

2 24 26

2 24 26

**Computing Conditional Probabilities
**

A conditional probability is the probability of one

event, given that another event has occurred:

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

The conditional probability of A given that B has occurred The conditional probability of B given that A has occurred

Where P(A and B) = joint probability of A and B P(A) = marginal probability of A P(B) = marginal probability of B

**Conditional Probability Example
**

What is the probability that a car has a CD player,

Of the it has AC used car lot, 70% have air given thatcars on a ? conditioning (AC) and 40% have a CD player (CD).we want to find P(CD | both. i.e., 20% of the cars have AC)

**Conditional Probability Example
**

(continued)

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. CD No CD Total

AC No AC Total

0.2 0.2 0.4

0.5 0.1 0.6

0.7 0.3 1.0

P(CD and AC) 0.2 P(CD | AC) = = = 0.2857 P(AC) 0.7

**Conditional Probability Example
**

(continued)

Given AC, we only consider the top row (70% of the cars). Of these, 20% have a CD player. 20% of 70% is about 28.57%.

CD

No CD

Total

AC No AC Total

0.2 0.2 0.4

0.5 0.1 0.6

0.7 0.3 1.0

P(CD and AC) 0.2 P(CD | AC) = = = 0.2857 P(AC) 0.7

**Using Decision Trees
**

Given AC or no AC:

P H A as C

0.7 )= AC (

.2 D .7 C Has

Doe s have not .5 CD

P(AC and CD) = 0.2

P(AC and CD’) = 0.5

All Cars

.7

Doe hav s not eA P(A C C’ ) =0 .3

.2 D .3 C Has

Doe s have not .1 CD

P(AC’ and CD) = 0.2

P(AC’ and CD’) = 0.1

.3

**Using Decision Trees
**

Given CD or no CD:

P(C H C as D

)= 0 D

.4

C as A H

.2 .4

(continued) P(CD and AC) = 0.2

Doe s have not .2 AC

P(CD and AC’) = 0.2

All Cars

.4

Doe hav s not eC D P(C D’) =0 .6

.5 .6 C A Has

Doe s have not .1 AC

P(CD’ and AC) = 0.5

P(CD’ and AC’) = 0.1

.6

Statistical Independence

Two events are independent if and only if:

P(A | B) = P(A)

Events A and B are independent when the probability of

one event is not affected by the other event

Multiplication Rules

Multiplication rule for two events A and B:

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

Note: If A and B are independent, then P(A | B) = P(A) and the multiplication rule simplifies to

P(A and B) = P(A) P(B)

Marginal Probability

Marginal probability for event A:

P(A) = P(A | B1 ) P(B1 ) + P(A | B 2 ) P(B2 ) + + P(A | Bk ) P(Bk )

Where B1, B2, …, Bk are k mutually exclusive and collectively exhaustive events

Counting Rules

Counting Rule 1:

If there are k1 events on the first trial, k2 events on the second trial, … and kn events on the nth trial, the number of possible outcomes is

Example:

(k1)(k2)…(kn)

You want to go to a park, eat at a restaurant, and see a movie. There are 3 parks, 4 restaurants, and 6 movie choices. How many different possible combinations are there? Answer: (3)(4)(6) = 72 different possibilities

Counting Rules

(continued)

Counting Rule 2:

The number of ways that n items can be arranged in order is

n! = (n)(n – 1)…(1)

Example:

Your restaurant has five menu choices for lunch. How many ways can you order them on your menu? Answer: 5! = (5)(4)(3)(2)(1) = 120 different possibilities

Counting Rules

(continued)

Counting Rule 3:

Permutations: The number of ways of arranging X objects selected from n objects in order is

Example:

n! n Px = (n − X)!

Your restaurant has five menu choices, and three are selected for daily specials. How many different ways can the specials menu be ordered? Answer:

nPx=

different possibilities

n! 5! 120 = = = 60 (n− X)! (5− 3)! 2

Counting Rules

(continued)

Counting Rule 4: Combinations: The number of ways of selecting X objects from n objects, irrespective of order, is

n! n Cx = X!(n − X)!

Example:

Your restaurant has five menu choices, and three are selected for daily specials. How many different special combinations are there, ignoring the order in which they are selected? Answer:

n Cx =

different possibilities

n! 5! 120 = = = 10 X! (n − X)! 3! (5 − 3)! (6)(2)

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