12 Chapter 1 EXAMPLE G EXAMPLE Probability PROPOSITION B The number of unordered samples of r objects selected from n objects without replacement is (*).. The numbers (?), called the binomial coefficients, occur in the expansion @t+py =) (jai = In particular, "fn P= = (i) This latter result can be interpreted as the number of subsets of a set of n objects. We just add the number of subsets of size 0 (with the usual convention that 0! = 1), and the number of subsets of size 1, and the number of subsets of size 2, ete. . Up until 1991, a player of the California state lottery could win the jackpot prize by choosing the 6 numbers from 1 to 49 that were subsequently chosen at random by the lottery officials. There are (‘2) = 13,983,816 possible ways to choose 6 numbers from 49, and so the probability of winning was about | in 14 million. If there were no winners, the funds thus accumulated were rolled over (carried over) into the next, round of play, producing a bigger jackpot. In 1991, the rules were changed so that a winner had to correctly select 6 numbers from I to 53. Since (7) = 22,957,480, the probability of winning decreased to about 1 in 23 million, Because of the ensuing rollover, the jackpot accumulated to a record of about $120 million. This produced a fever of play—people were buying tickets at the rate of between 1 and 2 million per hour and state revenues burgeoned. . In the practice of quality control, only a fraction of the output of a manufacturing process is sampled and examined, since it may be too time-consuming and expensive to examine each item, or because sometimes the testing is destructive. Suppose that nn items are in a lot and a sample of size r is taken. There are (”) such samples, Now suppose that the lot contains k defective items. What is the probability that the sample contains exactly m defectives? Clearly, this question is relevant to the efficacy of the sampling scheme, and the most desirable sample size can be determined by computing such probabilities for various values of r. Call the event in question A. The probability of A is the number of ways A can occur divided by the total number of outcomes. To find the number of, ways A can occur, we use the multiplication principle. There are (*) ways to choose the m defective items in the sample from the k defectives in the lot, and there are ("ck) ways to choose the r — m nondefective items in the sample from the n — k nondefectives in the lot. Therefore, A can occur in (*) (""*) ways. Thus, P(A) is theEXAMPLEL 1.4 Computing Probabilities: Counting Methods 13 ratio of the number of ways A can occur to the total number of outcomes, ot by (nk (ou) Con) P(A) Capture/Recapture Method The so-called capture/recapture method is sometimes used to estimate the size of a wildlife population. Suppose that 10 animals are captured, tagged, and released. On a later occasion, 20 animals are captured, and it is found that 4 of them are tagged. How large is the population? ‘We assume that there are n animals in the population, of which 10 are tagged. If the 20 animals captured later are taken in such a way that all (,) possible groups are equally likely (this is a big assumption), then the probability that 4 of them are tagged is (using the technique of the previous example) tara Go Clearly, n cannot be precisely determined from the information at hand, but it can be estimated. One method of estimation, called maximum likelihood, is to choose that value of n that makes the observed outcome most probable. (The method of maximum likelihood is one of the main subjects of a later chapter in this text.) The probability of the observed outcome as a function of n is called the likelihood. Figure 1.3 shows the likelihood as a function of n; the likelihood is maximized at n = 50. 035 030 025 020 Likelihood ous 0.10 0s ole 2 30 +4 «50 «60 70 «80 («100 FIGURE 1.3. Likelihood for Example I. To find the maximum likelihood estimate, suppose that, in general, ¢ animals are tagged. Then, of a second sample of size m, r tagged animals are recaptured. We estimate n by the maximizer of the likelihood Ly=