Eco 221 Notes Exam 2 copy

# Eco 221 Notes Exam 2 copy - Eco 221 Notes Exam 2...

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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 HW-review) 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.

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Eco 221 Notes Exam 2 copy - Eco 221 Notes Exam 2...

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