Assignment 4 Probability

Course Title: Business Statistics I
Assignment #4: Probability
Exercise #1
For each of the following, state whether the events created are mutually exclusive and
collectively exhaustive.
a. Registered voters were asked whether they are registered as Republicans or Democrats.
b. Each respondent was classified by the type of car he or she drives: sedan, SUV, American,
European, Asian, or none.
c. People were asked, “Do you currently live in (i) an apartment or (ii) a house?”
d. A product was classified as defective or not defective.
Exercise #2
A supplier shipped a lot of six parts to a company. The lot contained three defective parts.
Suppose the customer decided to randomly select two parts and test them for defects.
a. How large a sample space is the customer potentially working with?
b. Determine the probability that the customer will select a sample with exactly one defect.
Exercise #3
A small company has 20 employees. Six of these employees will be selected randomly to be
interviewed as part of an employee satisfaction program. How many different groups of six
can be selected?
Exercise #4
Suppose that 47% of all Americans have flown in an airplane at least once and that 28% of all
Americans have ridden on a train at least once.
What is the probability that a randomly selected American has either ridden on a train or
flown in an airplane? Can this problem be solved?
Under what conditions can it be solved? If the problem cannot be solved, what information is
needed to make it solvable?
Exercise #5
According to Nielsen Media Research, approximately 67% of all U.S. households with
television have cable TV. Seventy-four percent of all U.S. households with television have
two or more TV sets. Suppose 55% of all U.S. households with television have cable TV and
two or more TV sets. A U.S. household with television is randomly selected.
a. What is the probability that the household has cable TV or two or more TV sets?
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b. What is the probability that the household has cable TV or two or more TV sets but not
both?
c. What is the probability that the household has neither cable TV nor two or more TV sets?
d. Why does the special law of addition not apply to this problem?
Exercise #6
A study by Peter D. Hart Research Associates for the Nasdaq Stock Market revealed that
43% of all American adults are stockholders. In addition, the study determined that 75% of all
American adult stockholders have some college education. Suppose 37% of all American
adults have some college education. An American adult is randomly selected.
a. What is the probability that the adult does not own stock?
b. What is the probability that the adult owns stock and has some college education?
c. What is the probability that the adult owns stock or has some college education?
d. What is the probability that the adult has neither some college education nor owns stock?
e. What is the probability that the adult does not own stock or has no college education?
f. What is the probability that the adult has some college education and owns no stock?
Exercise #7
Arthur Andersen Enterprise Group/National Small Business United, Washington, conducted a

national survey of small-business owners to determine the challenges for growth for their
businesses. The top challenge, selected by 46% of the small business owners, was the
economy. A close second was finding qualified workers (37%). Suppose 15% of the small-
business owners selected both the economy and finding qualified workers as challenges for
growth. A small-business owner is randomly selected.
a. What is the probability that the owner believes the economy is a challenge for growth if the
owner believes that finding qualified workers is a challenge for growth?
b. What is the probability that the owner believes that finding qualified workers is a challenge
for growth if the owner believes that the economy is a challenge for growth?
c. Given that the owner does not select the economy as a challenge for growth, what is the
probability that the owner believes that finding qualified workers is a challenge for growth?
d. What is the probability that the owner believes neither that the economy is a challenge for
growth nor that finding qualified workers is a challenge for growth?
Exercise #8
Accounting Today reported that 37% of accountants purchase their computer hardware by
mail order direct and that 54% purchase their computer software by mail order direct.
Suppose that 97% of the accountants who purchase their computer hardware by mail order
direct purchase their computer software by mail order direct.
If an accountant is randomly selected, determine the following probabilities:
a. The accountant does not purchase his computer software by mail order direct given that he
does purchase his computer hardware by mail order direct.
b. The accountant does purchase his computer software by mail order direct given that he
does not purchase his computer hardware by mail order direct.
c. The accountant does not purchase his computer hardware by mail order direct if it is known
that he does purchase his computer software by mail order direct.
d. The accountant does not purchase his computer hardware by mail order direct if it is known
that he does not purchase his computer software by mail order direct.
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Exercise #9
In a manufacturing plant, machine A produces 10% of a certain product, machine B produces

40% of this product, and machine C produces 50% of this product. Five percent of machine A
products are defective, 12% of machine B products are defective, and 8% of machine C
products are defective. The company inspector has just sampled a product from this plant and
has found it to be defective.
Determine the revised probabilities that the sampled product was produced by machine A,
machine B, or machine C.

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Course Title: Business Statistics I

Assignment #4: Probability

Arthur Andersen Enterprise Group/National Small Business United, Washington, conducted a

In a manufacturing plant, machine A produces 10% of a certain product, machine B produces

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