Eco 221 Notes Exam 2
Probabilities:
MEASURES OF UNCERTAINTY
(Pg.166 Book)
1.
Simple event
– outcome of an experiment
a. Experiment – a repeatable problem/study
i.
Has two outcomes ie. 1. Defective
or 2. Not defective
b. Random experiment: take 2 people ask question “do u have college degree?”
i.
Yes or No …repeat x # of times.
1.
1
st
person (a1=Y)
2
nd
person (a1=Y)= a1=(Y,Y)= (simple event)
2.
1
st
person (a2=Y)
2
nd
person (a2=N)= a1=(Y,N)= (simple event)
2.
Sample Space
‘S’  all the outcomes of the simple events {a1,a2,a3,a4}
3.
Event
= A set of one of more simple events
a.
A1= {a2} , A1 is the event of the 1
st
person saying Yes
b.
A2 = {a1,a2} a1 + a2 is the event of only 1
st
person saying Yes
4.
Priori Classical

Empirical
–
Subjective
(p. 167 book)(10/16 p1 notebook HWreview)
a. Note that we can apply the classical probability when the events have the same chance
of occurring (called equally likely events), and the set of events are ME & CE.
5.
Mutually/Collectively Exhaustive
: (HW review pg 174 # 6(10/18/07 pg2 notebook)(pg 170book)
a. ME both events cannot occur at same time. One or the other. Male or Female
b. CE a set of ME events one of the events must occur.
Own American car or other.
Probability of Event: RELATIVE FREQUENCY
Relative Frequency = (No. of times event happens)/(Total # of experiments)
Ex. Repeat experiment 200 times.
RF
a1 (y,y) = 40
40/200 = .20
a2 (y,n) = 70
70/200 = .35
a3 (n,y) = 60
60/200 = .30
a4 (n,n) = 30
30/200 = .15
200
1.00
Find Prob. of person saying Yes No?
1. Look at a2
2. P1(A1) = RF(A1)=RF(a2) = 70/200 = 0.35 ;
35% chance of person saying yes.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '08
 MOSTAGHIMI
 Probability, Probability theory, simple event

Click to edit the document details