Eco2150 Events Intro and Recap Intersection Union Complement Important Results Exercises, Introduction ¢ In Introduction to Probability 1, | describe the some probability theory terminology: © Ex Ante vs. Ex Post; © Random Experiment; © Basic Outcomes; © Sample Space; e In this presentation, | will present important concepts to prepare us to compute probabilities: © Events Intersection; Mutually Exclusive Events; Events Union; Collectively Exhaustive Events; . . . © Complements. 217Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Intersection of Events Definition If A and B are two events in the sample space S, their intersection, denoted by A 2 B, is the set of all basic outcomes in S that belong to both A and B. ¢ The intersection A M B occurs if and only if both A and B occur. ¢ We will use the term joint probability of A and B to denote the probability of the intersection of A and B. B17Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Intersection of Events Example © Let A be the event of getting an even number when throwing a die; © Let B be the event of getting a number strictly greater than 2 when throwing a die; © A= {2,4,6}; © B= {3,4,5, 6}; °© Then AM B= {4,6} since 4 and 6 are in both A and B. °¢ AN Bis an event too! The next slide illustrates this intersection in a Venn Diagram. anyEco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Example (Cont.) s 1 Figure 1: An Intersection in a Venn Diagram nazEco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Intersection of Events More Generally Definition If we have K events Ay, A2,..., Ax in the sample space S, their intersection, Ay Az... Ak, is the set of all basic outcomes in S that belong to every Aj (i = 1,2,..., K). © The intersection of two events can be the empty set. Example * Let A be the event of getting an even number when throwing a die; © Let B be the event of getting an odd number when throwing a die; © A= {2,4,6}; © B= {1,3,5}; ° AM B=@ since there are no basic outcomes that are in both A and B. 6/17Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Mutually Exclusive Events Definition If A and B have no basic outcomes in common, they are said to be mutually exclusive. ¢ ANB =@ indicating that A M B cannot occur. Definition More generally, the K events Ay, Az, ..., Ax are mutually exclusive events if each pair of events A; and A; (i # j) have no basic outcome in common. 77Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Example (Cont.) S Figure 2: Three Mutually Exclusive Events nazEco2150 Events Intro and Recap __Intersection Union Complement __Important Results Exercises, Union of Two Events Definition The union of two events is the set of all basic outcomes in S that belong to at least one of these two events. It is denoted by AU B. © Hence the union of A and B occurs if and only if either A or B or both occur Example Let A be the event of getting an even number when throwing a die. Let B be the event of getting a number strictly greater than 2 when throwing a die. That is, © A= {2,4,6}; © B= {3,4,5,6}; Then A U B= {2,3,4,5,6} since 2, 3, 4, 5, 6 are in either A or B, or both. nazEco2150 Union AUB A Union in a Venn Diagram Events 10/17Eco2150 Events Intro and Recap __Intersection Union Complement __Important Results Exercises, Union of Events More Generally Definition If we have K events Ay, Az, ..., AK in the sample space S, their union, A, U Az U...U Ak, is the set of all basic outcomes in S belonging to at least one of these K events. sizEco2150 Events Intro and Recap __Intersection Union Complement __Important Results Exercises, Collectively Exhaustive Events Definition If we have K events Aj, Az, ..., Ax in the sample space S and their union is equal to S (Ay UA2 U... UAx = S$), then these K events are said to be collectively exhaustive. Example © The set of all basic outcomes contained in the sample space is collectively exhaustive (and mutually exclusive). e When rolling a die: © Let A be the event that the roll is a number strictly greater than 2 (A={3, 4,5, 6}). © Let B be the event that the roll is a number strictly smaller than 4 (B={1,2,3}). © Then A and B are collectively exhaustive. A U B= {1,2,3,4,5,6} = S. 12/17Eco2150 Events Intro and Recap _Intersection Union Complement Important Results Exercises, Complement Definition Let A be an event in the sample space, S. The set of basic outcomes of a random experiment belonging to S but not to A is called the complement and is denoted A‘. ¢ Aand A* are mutually exclusive and collectively exhaustive. Example Let A be the event of getting 2 when throwing a die. © A=(2}; © Ae = {1,3,4,5, 6}; © Then, ANAS = @ and AUAS=S. 13/17Eco2150 Events Complement A Complement in a Venn Diagram 14/17Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results Exercises, Three Important Results When computing probabilities we will use these three important results: 1. (AN B)U(ASN B) =B. Notice that (AM B) and (ASM B) are mutually exclusive. 2. AU(AS NB) = AUB. Notice that A and (A° 1 B) are mutually exclusive. 3. If we have K mutually exclusive and collectively exhaustive events Aj, Ao,..., Ax and B, some other event, then (A109 B)U(A2N B)U...U (AK 9 B) = B. (ena ae) 15/17Eco2150 Events Intro and Recap _Intersection Union Complement __Important Results _ Exercises Exercises Suggested Exercise Js there a link between mutually exclusive events and collectively exhaustive events? That is, if two events are mutually exclusive (collectively exhaustive), do we know whether they are collectively exhaustive (mutually exclusive)? Suggested Exercise Use Venn diagrams to show that © (AUB)S = AEN BE. Ss uggested Exercise Use Venn diagrams to illustrate the important results #41 and #2. 16/17Eco2150 Events Intro and Recap Intersection Union Complement Important Results Exercises Ag Figure 5: Illustration of Important Result # 3 wiz