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Unformatted text preview: Sets and Probability Chapter 7 Ch. 7 Sets and Probabilities l 42 Basic Concepts of Probability l 43 Addition Rule l 44 Multiplication Rule l 45 Multiplication Rule: Complements and Conditional Probability l 46 Counting l 47 Bayes’ Theorem B. Potter  ECO 3401 2 42 Basic Concepts of Probability l Probability is a numerical measure of the likelihood that an event will occur. l Probability values are always assigned on a scale from 0 to 1. l A probability near 0 indicates an event is very unlikely to occur. l A very small probability (0.001 for example) corresponds to an event that is unusual . l A probability near 1 indicates an event is almost certain to occur. l A probability of 0.5 indicates the occurrence of the event is just as likely as it is unlikely. B. Potter  ECO 3401 3 l A procedure is any process that generates welldefined outcomes. Procedure Outcome Toss a coin Heads, Tails Roll a die 1, 2, 3, 4, 5, 6 Take a test A, B, C, D, F B. Potter  ECO 3401 Basics of Probability 4 l A procedure is any process that generates welldefined outcomes. l An event is any collection of results or outcomes of a procedure. B. Potter  ECO 3401 Basics of Probability Procedure Outcome Toss a coin Heads, Tails Roll a die 1, 2, 3, 4, 5, 6 Take a test A, B, C, D, F Event: odd numbers 5 l A procedure is any process that generates welldefined outcomes. l An event is any collection of results or outcomes of a procedure. l A simple event is an outcome, or an event that cannot be further broken down into simpler components. B. Potter  ECO 3401 Basics of Probability Procedure Outcome Toss a coin Heads, Tails Roll a die 1, 2, 3, 4, 5, 6 Take a test A, B, C, D, F Simple event: tails 6 l A procedure is any process that generates welldefined outcomes. l An event is any collection of results or outcomes of a procedure. l A simple event is an outcome, or an event that cannot be further broken down into simpler components. l The sample space for a procedure consists of all possible simple events. B. Potter  ECO 3401 Basics of Probability Procedure Outcome Take a test A, B, C, D, F Sample space 7 Basics of Probability l Notation for Probabilities l P denotes a probability l A, B, and C denote specific events l P ( A ) denotes the probability of event A occurring. B. Potter  ECO 3401 8 Assigning Probabilities l Classical Method Assigning probabilities based on the assumption of equally likely outcomes . If event A can occur in s ways, then B. Potter  ECO 3401 ( 29 number of ways can occur number of possible outcomes A s P A n = = 9 Assigning Probabilities...
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This note was uploaded on 01/12/2012 for the course ECO 3401 taught by Professor Staff during the Fall '08 term at University of Central Florida.
 Fall '08
 Staff

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