ch04 - 4.1 Experiment: When a process that results in one...

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4.1 Experiment: When a process that results in one and only one of many observations is performed, it is called an experiment. Outcome: The result of the performance of an experiment is called an outcome. Sample space: The collection of all outcomes for an experiment is called a sample space. Simple event: A simple event is an event that includes one and only one of the final outcomes of an experiment. Compound event: A compound event is an event that includes more than one of the final outcomes of an experiment. 4.3 The experiment of selecting two items from the box without replacement has the following six possible outcomes: AB , AC , BA , BC , CA , CB . Hence, the sample space is written as S = { AB, AC, BA, BC, CA, CB } 4.5 Let: L = person is computer literate I = person is computer illiterate The experiment has four outcomes: LL, LI, IL, and II. 4.7 Let: G = the selected part is good D = the selected part is defective The four outcomes for this experiment are: GG, GD, DG, and DD 4.9 Let: H = a toss results in a head and T = a toss results in a tail Thus the sample space is written as S = { HHH, HHT, HTH, HTT, THH, THT, TTH, TTT }
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4.11 a. { LI, IL }; a compound event c. { II, IL, LI }; a compound event b. { LL, LI, IL }; a compound event d. { LI }; a simple event 4.13 a. { DG, GD, GG }; a compound event c. { GD }; a simple event b. { DG, GD }; a compound event d. { DD, DG, GD }; a compound event 4.15 The following are the two properties of probability. 1. The probability of an event always lies in the range zero to 1, that is: 1 ) ( 0 i E P and 1 ) ( 0 A P 2. The sum of the probabilities of all simple events for an experiment is always 1, that is: = + + + = 1 ) ( ) ( ) ( ) ( 3 2 1 E P E P E P E P i 4.17 The following are three approaches to probability. 1. Classical probability approach: When all outcomes are equally likely, the probability of an event A is given by: experiment the ub outcomes of Number Total in outcomes of Number ) ( A A P = For example, the probability of observing a 1 when a fair die is tossed once is 1/6. 2. Relative frequency approach: If an event A occurs f times in n repetitions of an experiment, then P ( A ) is approximately f / n . As the experiment is repeated more and more times, f / n approaches P ( A ). For example, if 510 of the last 1000 babies born in a city are male, the probability of the next baby being male is approximately 510/1000 = .510 3. Subjective probability approach: Probabilities are derived from subjective judgment, based on experience, information and belief. For example, a banker might estimate the probability of a new donut shop surviving for two years to be 1/3 based on prior experience with similar businesses. 4.19
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This note was uploaded on 10/14/2009 for the course ECON 41 taught by Professor Guggenberger during the Fall '07 term at UCLA.

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ch04 - 4.1 Experiment: When a process that results in one...

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