Statistics with Economics and

Business Applications

Chapter 3 Probability and Discrete Probability

Distributions

Experiment, Event, Sample space, Probability, Counting rules,

Conditional probability, Bayes’s rule, random variables, mean,
variance 5E Note 4
 Review
I. What’s in last lecture?
Descriptive Statistics – Numerical Measures.
Chapter 2.

II. What's in this and the next two lectures?

Experiment, Event, Sample space, Probability,
Counting rules, Conditional probability,
Bayes’s rule, random variables, mean,
variance. Read Chapter 3.
5E Note 4
 Descriptive and Inferential Statistics

Statistics can be broken into two basic types:

• Descriptive Statistics (Chapter 2):
We have already learnt this topic
• Inferential Statistics (Chapters 7-13):
Methods that making decisions or predictions
about a population based on sampled data.
• What are Chapters 3-6?
Probability
5E Note 4
 Why Learn Probability?
• Nothing in life is certain. In everything we do, we gauge the
chances of successful outcomes, from business to medicine
to the weather
• A probability provides a quantitative description of the
chances or likelihoods associated with various outcomes
• It provides a bridge between descriptive and inferential
statistics

Probability
Population Sample
Statistics
5E Note 4
 Probabilistic vs Statistical Reasoning
• Suppose I know exactly the proportions of car
makes in California. Then I can find the
probability that the first car I see in the street is a
Ford. This is probabilistic reasoning as I know
the population and predict the sample
• Now suppose that I do not know the proportions
of car makes in California, but would like to
estimate them. I observe a random sample of
cars in the street and then I have an estimate of
the proportions of the population. This is
statistical reasoning

5E Note 4
 What is Probability?
• In Chapters 2, we used graphs and
numerical measures to describe data sets
which were usually samples.
• We measured “how often” using
Relative
Relative frequency
frequency == f/n
f/n
• As n gets larger,
Sample Population
And “How often”
= Relative frequency Probability
Note 5 of 5E
 Basic Concepts
• An experiment is the process by which
an observation (or measurement) is
obtained.
• An event is an outcome of an experiment,
usually denoted by a capital letter.
– The basic element to which probability
is applied
– When an experiment is performed, a
particular event either happens, or it
doesn’t!
Note 5 of 5E
Experiments and Events
• Experiment: Record an age
– A: person is 30 years old
– B: person is older than 65
• Experiment: Toss a die
– A: observe an odd number
– B: observe a number greater than 2

Note 5 of 5E
 Basic Concepts
• Two events are mutually exclusive if,
when one event occurs, the other cannot,
and vice versa.
•Experiment: Toss a die Not Mutually
–A: observe an odd number Exclusive

–B: observe a number greater than 2

–C: observe a 6 B and C?
Mutually
–D: observe a 3 Exclusive B and D?
Note 5 of 5E
 Basic Concepts
• An event that cannot be decomposed is called
a simple event.
• Denoted by E with a subscript.
• Each simple event will be assigned a
probability, measuring “how often” it occurs.
• The set of all simple events of an experiment
is called the sample space, S.

Note 5 of 5E
 Example
• The die toss:
• Simple events: Sample space:
11 E1
S ={E1, E2, E3, E4, E5, E6}
22 E2
S
33 E3 •E1 •E3
44 •E5
E4
55 •E2 •E6
E5 •E4
66
E6 Note 5 of 5E
 Basic Concepts
• An event is a collection of one or more
simple events.
S
•E1 •E3
•The die toss: A •E5
–A: an odd number B
–B: a number > 2 •E2 •E4 •E6

A ={E1, E3, E5}

B ={E3, E4, E5, E6}
Note 5 of 5E
 The Probability
of an Event
• The probability of an event A measures “how often”
A will occur. We write P(A).
• Suppose that an experiment is performed n times.
The relative frequency for an event A is

Number of times A occurs f


n n
• If we let n get infinitely large,
ff
PP((AA)) lim
lim n
 n
nn
Note 5 of 5E
 The Probability
of an Event
• P(A) must be between 0 and 1.
– If event A can never occur, P(A) = 0. If
event A always occurs when the
experiment is performed, P(A) =1.
• The sum of the probabilities for all
simple events in S equals 1.
•• The
The probability
probability of
of an
an event
event AA isis found
found
by
by adding
adding the
the probabilities
probabilities of
of all
all the
the
simple
simple events
events contained
contained in
in A.
A. Note 5 of 5E
 Finding Probabilities
• Probabilities can be found using
– Estimates from empirical studies
– Common sense estimates based on
equally likely events.
• Examples:
–Toss a fair coin. P(Head) = 1/2
– Suppose that 10% of the U.S. population has
red hair. Then for a person selected at random,
P(Red hair) = .10 Note 5 of 5E
 Using Simple Events
• The probability of an event A is equal to
the sum of the probabilities of the simple
events contained in A
• If the simple events in an experiment are
equally likely, you can calculate

nnAA number
number of
of simple
simple events
events in
in A
A
PP((AA))  
NN total
totalnumber
numberofof simple
simpleevents
events
Note 5 of 5E
 Example 1
Toss a fair coin twice. What is the probability
of observing at least one head?

1st Coin 2nd Coin Ei P(Ei)

H
H HH
HH 1/4 P(at
H P(atleast
least11head)
head)
H
TT HT
HT 1/4 ==P(E
P(E11))++P(E
P(E22))++P(E
P(E33))
H
H TH
TH 1/4 ==1/4
1/4++1/4
1/4++1/4
1/4==3/4
3/4
TT
TT TT 1/4
TT
Note 5 of 5E
 Example 2
A bowl contains three M&Ms®, one red, one blue and
one green. A child selects two M&Ms at random.
What is the probability that at least one is red?

1st M&M 2nd M&M Ei P(Ei)

m RB
m RB 1/6
m RG
RG 1/6 P(at
P(atleast
least11red)
red)
m BR
m BR 1/6 ==P(RB)
P(RB)++P(BR)+
P(BR)+P(RG)
P(RG)
m ++P(GR)
BG
BG P(GR)
1/6
m ==4/6
m GB
GB 4/6==2/3
2/3
m
1/6
GR
GR
1/6 Note 5 of 5E
 Example 3
The sample space of throwing a pair of dice is

Note 5 of 5E
 Example 3
Event Simple events Probability

Dice add to 3 (1,2),(2,1) 2/36

Dice add to 6 (1,5),(2,4),(3,3), 5/36
(4,2),(5,1)
Red die show 1 (1,1),(1,2),(1,3), 6/36
(1,4),(1,5),(1,6)
Green die show 1 (1,1),(2,1),(3,1), 6/36
(4,1),(5,1),(6,1)
Note 5 of 5E
 Counting Rules
• Sample space of throwing 3 dice has
216 entries, sample space of throwing
4 dice has 1296 entries, …
• At some point, we have to stop listing
and start thinking …
• We need some counting rules

Note 5 of 5E
 The mn Rule
• If an experiment is performed in two stages,
with m ways to accomplish the first stage and
n ways to accomplish the second stage, then
there are mn ways to accomplish the
experiment.
• This rule is easily extended to k stages, with
the number of ways equal to
n1 n2 n3 … nk
Example: Toss two coins. The total number of
simple events is:
22  22 == 44
Note 5 of 5E
 Examples m

m
Example: Toss three coins. The total number of
simple events is: 22  22  22 == 88
Example: Toss two dice. The total number of
simple events is: 6  6 = 36
6  6 = 36
Example: Toss three dice. The total number of
simple events is: 6  6  6 = 216
6  6  6 = 216
Example: Two M&Ms are drawn from a dish
containing two red and two blue candies. The total
number of simple events is:
44  33 == 12
12 Note 5 of 5E
 Permutations
• The number of ways you can arrange
n distinct objects, taking them r at a time
is Prn  n!
(n  r )!
where n! n(n  1)(n  2)...(2)(1) and 0! 1.
Example: How many 3-digit lock combinations
can we make from the numbers 1, 2, 3, and 4?
The order of the choice is 44!!
important!
PP   44((33)()(22))  24
44
33 24
11!! Note 5 of 5E
 Examples
Example: A lock consists of five parts and
can be assembled in any order. A quality
control engineer wants to test each order for
efficiency of assembly. How many orders are
there?
The order of the choice is
important!
55!!
PP  55((44)()(33)()(22)()(11)) 120
55
55 120
00!!
Note 5 of 5E
 Combinations
• The number of distinct combinations of n
distinct objects that can be formed,
taking them r at a time is n n!
Cr 
r!(n  r )!
Example: Three members of a 5-person committee must
be chosen to form a subcommittee. How many different
subcommittees could be formed?
55!! 55((44)()(33)()(22))11 55((44))
The order of CC 
55
33   10
10
the choice is 33!!((5533)!)! 33((22)()(11)()(22))11 ((22))11
not important! Note 5 of 5E
 Example m
m m
m mm
• A box contains six M&Ms®, four red
and two green. A child selects two M&Ms at random.
What is the probability that exactly one is red?

2!
6! 6(5) C 
2
2
The order of C2 
6
  15 1
1!1!
2!4! 2(1)
the choice is ways to choose
not important! ways to choose 2 M & Ms.
1 green M & M.
4!
C 
1
4
4 4  2 =8 ways to
1!3! choose 1 red and 1 P(exactly one
ways to choose green M&M. red) = 8/15
1 red M & M.
Note 5 of 5E
 Example
A deck of cards consists of 52 cards, 13 "kinds"
each of four suits (spades, hearts, diamonds, and
clubs). The 13 kinds are Ace (A), 2, 3, 4, 5, 6, 7,
8, 9, 10, Jack (J), Queen (Q), King (K). In many
poker games, each player is dealt five cards from
a well shuffled deck.
52
52!! 52
52((51
51)()(50
50 )()(49
49 ))48
48  2,598,960
There are C
There are C  
52
52
55 
  2,598,960
55!!((52  5)!
52  5)! 5( 4 )(3)(
5(4)(3)(2)1 2 )1
possible
possiblehands
hands
Note 5 of 5E
 Example
Four of a kind: 4 of the 5 cards are the same
“kind”. What is the probability of getting
four of a kind in a five card hand?
There are 13 possible choices for the kind of
which to have four, and 52-4=48 choices for the
fifth card. Once the kind has been specified, the
four are completely determined: you need all
four cards of that kind. Thus there are
13×48=624 ways to get four of a kind.
The probability=624/2598960=.000240096
and
  Note 5 of 5E
 Example
One pair: two of the cards are of one kind,
the other three are of three different kinds.
What is the probability of getting one pair
in a five card hand?
There
Thereare
are13
13possible
possiblechoices
choicesfor
for the
thekind
kind
of
of which
which to
tohave
haveaa pair;
pair;given
given the
thechoice,
choice,
C  66possible
44
there
thereare
areC22 possiblechoices
choicesof
of two
two
of
of the
thefour
four cards
cardsof
of that
that kind
kind Note 5 of 5E
 Example
There are 12 kinds remaining from
which to select the other three cards in
the hand. We must insist that the kinds
be different from each other and from
the kind of which we have a pair, or we
could end up with a second pair, three
or four of a kind, or a full house.

Note 5 of 5E
 Example
areCC  220
12
There
Thereare 12
33 220ways
waystotopick
pick the
thekinds
kindsof
of
the
theremaining
remaining three
threecards.
cards.There
Thereare
are44choices
choices
for
for the
thesuit
suit of
of each
eachofof those
those three
threecards,
cards,aa total
total
of 4 64
33
of 4 64choices
choicesfor
for the
thesuits
suitsofof all
allthree.
three.
Therefore
Thereforethe
thenumber
numberofof ""one
onepair"
pair"hands
handsisis
1366220
13 22064
641,098,240.
1,098,240.
The probabilityy1098240/25
Theprobabilit 98960 
1098240/2598960
..422569
422569
Note 5 of 5E
 Event Relations
The beauty of using events, rather than simple events, is
that we can combine events to make other events using
logical operations: and, or and not.
The union of two events, A and B, is the event that
either A or B or both occur when the experiment is
performed. We write
A B

A B A B

Note 5 of 5E
 Event Relations
The intersection of two events, A and B, is
the event that both A and B occur when the
experiment is performed. We write A B.
S

A B A B

• If two events A and B are mutually

exclusive, then P(A B) = 0.
Note 5 of 5E
 Event Relations
The complement of an event A consists of
all outcomes of the experiment that do not
result in event A. We write AC.

S
AC

Note 5 of 5E
 Example
Select a student from the classroom and
record his/her hair color and gender.
– A: student has brown hair
– B: student is female
– C: student is male Mutually exclusive; B = CC
What is the relationship between events B and C?
•AC: Student does not have brown hair
•BC: Student is both male and female = 
•BC: Student is either male and female = all students = S
Note 5 of 5E
 Calculating Probabilities for
Unions and Complements
• There are special rules that will allow you to
calculate probabilities for composite events.
• The Additive Rule for Unions:
• For any two events, A and B, the probability
of their union, P(A B), is

PP((AA
BB))  PP((AA)) PP((BB))PP((AA
BB))
A B

Note 5 of 5E
Example: Additive Rule
Example: Suppose that there were 120
students in the classroom, and that they
could be classified as follows:
A: brown hair Brown Not Brown
P(A) = 50/120 Male 20 40
B: female Female 30 30
P(B) = 60/120
P(AB)
P(AB) == P(A)
P(A) ++ P(B)
P(B) –– P(AB)
P(AB)
==50/120
50/120 ++ 60/120
60/120 -- 30/120
30/120
==80/120
80/120 == 2/3
2/3 Check:
Check: P(AB)
P(AB)
== (20
(20 ++ 30
30 ++ 30)/120
30)/120
Note 5 of 5E
 Example: Two Dice
A: red die show 1
B: green die show 1

P(AB)
P(AB) == P(A)
P(A) ++ P(B)
P(B) –– P(AB)
P(AB)
== 6/36
6/36 ++6/36
6/36 –– 1/36
1/36
== 11/36
11/36
Note 5 of 5E
 A Special Case
When two events A and B are
mutually exclusive, P(AB) = 0
and P(AB) = P(A) + P(B).
A: male with brown hair Brown Not Brown
P(A) = 20/120 Male 20 40
B: female with brown hair Female 30 30
P(B) = 30/120
A and B are mutually P(AB)
P(AB) == P(A)
P(A) ++ P(B)
P(B)
== 20/120
20/120 ++ 30/120
30/120
exclusive, so that
== 50/120
50/120
Note 5 of 5E
 Example: Two Dice

A: dice add to 3
B: dice add to 6

A and B are mutually P(AB)

P(AB) == P(A)
P(A) ++ P(B)
P(B)
== 2/36
2/36 ++5/36
5/36
exclusive, so that
== 7/36
7/36
Note 5 of 5E
 Calculating Probabilities AC
A
for Complements
• We know that for any event A:
– P(A AC) = 0
• Since either A or AC must occur,
P(A AC) =1
• so that P(A AC) = P(A)+ P(AC) = 1

P(A
P(A )) == 11 –– P(A)
CC
P(A)
Note 5 of 5E
 Example
Select a student at random from
the classroom. Define:
A: male Brown Not Brown
P(A) = 60/120 Male 20 40
B: female Female 30 30
P(B) = ?

A and B are P(B)

P(B) == 1-
1- P(A)
P(A)
complementary, so that == 1-
1- 60/120
60/120 == 60/120
60/120
Note 5 of 5E
 Calculating Probabilities for
Intersections
In the previous example, we found P(A  B)
directly from the table. Sometimes this is
impractical or impossible. The rule for calculating
P(A  B) depends on the idea of independent
and dependent events.
Two
Two events,
events, A
A and
and B,
B, are
are said
said to
to be
be
independent
independent ifif the
the occurrence
occurrence or or
nonoccurrence
nonoccurrence of of one
one of
of the
the events
events does
does
not
not change
change the
the probability
probability ofof the
the
occurrence
occurrence of
of the
the other
other event.
event. Note 5 of 5E
 Conditional Probabilities
The probability that A occurs, given
that event B has occurred is called
the conditional probability of A
given B and is defined as
PP((AA  BB))
PP((AA||BB))  ifif PP((BB))  00
PP((BB))

“given”
Note 5 of 5E
 Example 1
Toss a fair coin twice. Define
– A: head on second toss
– B: head on first toss
P(A|B)
P(A|B) == ½
½
HH
HH 1/4 P(A|not
P(A|not B)
B) ==½
½
HT
HT 1/4
P(A) does not A and B are
TH 1/4
TH change, whether independent!
1/4 B happens or
TT
TT
not…
Note 5 of 5E
 Example 2
A bowl contains five M&Ms®, two red and three blue.
Randomly select two candies, and define
– A: second candy is red.
– B: first candy is blue.

m P(A|B)
P(A|B) =P(2
=P(2nd red|1
nd
red|1st blue)=
st
blue)= 2/4
2/4 == 1/2
1/2
m m
P(A|not
P(A|not B)
B) == P(2
P(2nd red|1
nd
red|1st red)
st
red) == 1/4
1/4
m m

P(A) does change,

depending on A and B are
whether B happens dependent!
or not… Note 5 of 5E
 Example 3: Two Dice
Toss a pair of fair dice. Define
– A: red die show 1
– B: green die show 1

P(A|B)
P(A|B) == P(A
P(A and
and B)/P(B)
B)/P(B)
=1/36/1/6=1/6=P(A)
=1/36/1/6=1/6=P(A)

P(A) does not

change, whether A and B are
B happens or independent!
not… Note 5 of 5E
 Example 3: Two Dice
Toss a pair of fair dice. Define
– A: add to 3
– B: add to 6

P(A|B)
P(A|B) == P(A
P(A and
and B)/P(B)
B)/P(B)
=0/36/5/6=0
=0/36/5/6=0

P(A) does change A and B are dependent!

when B happens In fact, when B happens,
A can’t
Note 5 of 5E
 Defining Independence
• We can redefine independence in terms
of conditional probabilities:
Two
Two events
events A
A and
and BB are
are independent
independent ifif and
and
only
only ifif
P(AB)
P(A B) == P(A)
P(A) oror P(B|A)
P(B|A) == P(B)
P(B)
Otherwise,
Otherwise, they
they are
are dependent.
dependent
dependent.
dependent
• Once you’ve decided whether or not two
events are independent, you can use the
following rule to calculate their
intersection. Note 5 of 5E
 The Multiplicative Rule for
Intersections
• For any two events, A and B, the
probability that both A and B occur is
P(A B)
P(A B) == P(A)
P(A) P(B
P(B given
given that
that A
A occurred)
occurred)
== P(A)P(B|A)
P(A)P(B|A)
• If the events A and B are independent, then
the probability that both A and B occur is
P(A B)
P(A B) == P(A)
P(A) P(B)
P(B)
Note 5 of 5E
 Example 1
In a certain population, 10% of the people can be
classified as being high risk for a heart attack. Three
people are randomly selected from this population.
What is the probability that exactly one of the three are
high risk?
Define H: high risk N: not high risk
P(exactly
P(exactly one
one high
high risk)
risk) == P(HNN)
P(HNN) ++ P(NHN)
P(NHN) ++ P(NNH)
P(NNH)
== P(H)P(N)P(N)
P(H)P(N)P(N) ++ P(N)P(H)P(N)
P(N)P(H)P(N) ++ P(N)P(N)P(H)
P(N)P(N)P(H)
== (.1)(.9)(.9)
(.1)(.9)(.9) ++ (.9)(.1)(.9)
(.9)(.1)(.9) ++ (.9)(.9)(.1)=
(.9)(.9)(.1)= 3(.1)(.9)
3(.1)(.9)2 == .243
2
.243

Note 5 of 5E
 Example 2
Suppose we have additional information in the
previous example. We know that only 49% of the
population are female. Also, of the female patients, 8%
are high risk. A single person is selected at random. What
is the probability that it is a high risk female?
Define H: high risk F: female
From
Fromthethe example,
example, P(F)
P(F) ==.49
.49 and
and P(H|F)
P(H|F) == .08.
.08.
Use
Use the
the Multiplicative
Multiplicative Rule:
Rule:
P(high
P(high risk
risk female)
female) == P(HF)
P(HF)
== P(F)P(H|F)
P(F)P(H|F) =.49(.08)
=.49(.08) ==.0392
.0392
Note 5 of 5E
The Law of Total Probability
Let S1 , S2 , S3 ,..., Sk be mutually exclusive
and exhaustive events (that is, one and only
one must happen). Then the probability of
any event A can be written as
P(A) P(A 
P(A) == P(A P(A 
 SS11)) ++ P(A  SS22)) ++ … P(A 
… ++ P(A  SSkk))
== P(S
P(S11)P(A|S
)P(A|S11)) ++ P(S
P(S22)P(A|S
)P(A|S22)) ++ …
… ++ P(S
P(Skk)P(A|S
)P(A|Skk))

Note 5 of 5E
 The Law of Total Probability
S1

A Sk
A

A  S1
Sk
S2….

P(A) P(A 
P(A) == P(A P(A 
 SS11)) ++ P(A  SS22)) ++ … P(A 
… ++ P(A  SSkk))
== P(S
P(S11)P(A|S
)P(A|S11)) ++ P(S
P(S22)P(A|S
)P(A|S22)) ++ …
… ++ P(S
P(Skk)P(A|S
)P(A|Skk))

Note 5 of 5E
 Bayes’ Rule
Let S1 , S2 , S3 ,..., Sk be mutually exclusive and
exhaustive events with prior probabilities P(S1),
P(S2),…,P(Sk). If an event A occurs, the posterior
probability of Si, given that A occurred is
PP((SSii))PP((AA|| SSii))
PP((SSii || AA))  forii  11,, 22,...k
for ,...k

PP((SSii))PP((AA||SSii))
Proof
Proof
PP((AS
AS i i))
PP((AA| |SSi i)) 

 ASi i))PP((SSi i))PP((AA| |SSi i))
PP((AS
PP((SSi i))
PP((AS
AS i i)) PP((SSi i))PP((AA| |SSi i))
PP((SSi i | | AA)) 
PP((AA)) PP((SSi i))PP((AA| |SSi i))
Note 5 of 5E
 Example
From a previous example, we know that 49% of the
population are female. Of the female patients, 8% are
high risk for heart attack, while 12% of the male patients
are high risk. A single person is selected at random and
found to be high risk. What is the probability that it is a
male? Define H: high risk F: female M: male

We PP((MM))PP((HH| |MM))
We know:
know: PP((MM| |HH))
P(F)
P(F) ==
.49 PP((MM))PP((HH| |MM))PP((FF))PP((HH| |FF))
P(M) .51
P(M) == 
.51
.51 (.(.12
12))
.61
P(H|F) .61
P(H|F) == .08 .51 (.12 )  . 49 (.
.51 (.12)  .49 (.08) 08)
P(H|M)
P(H|M) == .12
Note 5 of 5E
 Example
Suppose a rare disease infects one out of
every 1000 people in a population. And
suppose that there is a good, but not perfect,
test for this disease: if a person has the
disease, the test comes back positive 99% of
the time. On the other hand, the test also
produces some false positives: 2% of
uninfected people are also test positive. And
someone just tested positive. What are his
chances of having this disease?

Note 5 of 5E
 Example
Define A: has the disease B: test positive
We
We know:
know:
P(A)
P(A) == .001
.001 P(A
P(A )) =.999
cc
=.999
P(B|A)
P(B|A) == .99
.99 P(B|A
P(B|Ac)) =.02
c
=.02

We want to know P(A|B)=?

PP((AA))PP((BB||AA))
PP((AA | | BB))  c c
PP((AA))PP((BB||AA))PP((AA ))PP((BB||AAc))
c

001  ..99
..001 99
  ..0472
0472
..001  .99  . 999 
001  .99  .999  .02 . 02 Note 5 of 5E
 Example
A survey of job satisfaction2 of teachers was
taken, giving the following results
Job Satisfaction
Satisfied Unsatisfied Total
L
E
College 74 43 117
V High School 224 171 395
E
L Elementary 126 140 266
Total 424 354 778

2
“Psychology of the Scientist: Work Related Attitudes of U.S. Scientists”
(Psychological Reports (1991): 443 – 450). Note 5 of 5E
 Example
If all the cells are divided by the total number
surveyed, 778, the resulting table is a table of
empirically derived probabilities.

Job Satisfaction
Satisfied Unsatisfied Total
L College 0.095 0.055 0.150
E
V High School 0.288 0.220 0.508
E
L Elementary 0.162 0.180 0.342
Total 0.545 0.455 1.000

Note 5 of 5E
 Job Satisfaction
Satisfied Unsatisfied Total

Example College 0.095 0.055

L
E
0.150
V High School 0.288 0.220 0.508
E
L Elementary 0.162 0.180 0.342
Total 0.545 0.455 1.000

For convenience, let C stand for the event that

the teacher teaches college, S stand for the
teacher being satisfied and so on. Let’s look at
some probabilities and what they mean.

P(C)  0.150 is the proportion of teachers who are

college teachers.
P(S)  0.545 is the proportion of teachers who are
satisfied with their job.
P(C  S)  0.095 is the proportion of teachers who are
college teachers and who are satisfied
Note 5 of 5E
with their job.
 Job Satisfaction
Satisfied Unsatisfied Total
L College 0.095 0.055 0.150
E

Example V
E
L
High School 0.288
Elementary
Total
0.162
0.545
0.220
0.180
0.455
0.508
0.342
1.000

P(C  S) is the proportion of teachers who

P(C | S)  are college teachers given they are
P(S)
satisfied. Restated: This is the
0.095
  0.175 proportion of satisfied that are
0.545 college teachers.

P(S C) is the proportion of teachers who

P(S | C) 
P(C) are satisfied given they are college
P(C  S) 0.095 teachers. Restated: This is the
 
P(C) 0.150 proportion of college teachers that
 0.632 are satisfied. Note 5 of 5E
 Job Satisfaction
Satisfied Unsatisfied Total
L College 0.095 0.055 0.150
Example E
V
E
L
High School 0.288
Elementary 0.162
0.220
0.180
0.508
0.342
Total 0.545 0.455 1.000

Are C and S independent events?

P(C  S) 0.095
P(C)  0.150 and P(C | S)    0.175
P(S) 0.545

P(C|S)  P(C) so C and S are dependent events.

Note 5 of 5E
 Job Satisfaction
Satisfied Unsatisfied Total
L College 0.095 0.055 0.150
Example E
V
E
L
High School
Elementary
0.288
0.162
0.220
0.180
0.508
0.658
Total 0.545 0.455 1.000

P(CS)?

P(C) = 0.150, P(S) = 0.545 and

P(CS) = 0.095, so
P(CS) = P(C)+P(S) - P(CS)
= 0.150 + 0.545 - 0.095
= 0.600
Note 5 of 5E
 Example
Tom and Dick are going to take
a driver's test at the nearest DMV office. Tom
estimates that his chances to pass the test are
70% and Dick estimates his as 80%. Tom and
Dick take their tests independently.
Define D = {Dick passes the driving test}
T = {Tom passes the driving test}
T and D are independent.
P (T) = 0.7, P (D) = 0.8 Note 5 of 5E
 Example
What is the probability that at most one of
the two friends will pass the test?
P(At
P(At most
most oneone person
person pass)
pass)
P(Dc 
== P(D P(Dc
 TTc)) ++ P(D  T) P(D 
T) ++ P(D  TTc))
c c c c

== (1
(1 -- 0.8)
0.8) (1
(1 –– 0.7)
0.7) ++ (0.7)
(0.7) (1
(1 –– 0.8)
0.8) ++ (0.8)
(0.8) (1
(1 –– 0.7)
0.7)
== .44
.44

P(At
P(At most
most one
one person
person pass)
pass)
== 1-P(both
1-P(both pass)
pass) == 1-
1- 0.8
0.8 xx 0.7
0.7 == .44
.44
Note 5 of 5E
 Example
What is the probability that at least one of
the two friends will pass the test?
P(At
P(At least
least one
one person
person pass)
pass)
P(D 
== P(D T)
T)
== 0.8
0.8 ++ 0.7
0.7 -- 0.8
0.8 xx 0.7
0.7
== .94
.94
P(At
P(At least
least one
one person
person pass)
pass)
== 1-P(neither
1-P(neither passes)
passes) == 1-
1- (1-0.8)
(1-0.8) xx (1-0.7)
(1-0.7) == .94
.94
Note 5 of 5E
 Example
Suppose we know that only one of the two
friends passed the test. What is the
probability that it was Dick?
P(D
P(D || exactly
exactly one
one person
person passed)
passed)
P(D 
== P(D exactly
exactly one
one person
person passed)
passed) // P(exactly
P(exactly one
one
person
person passed)
passed)
P(D  T ) / (P(D  T ) + P(D 
== P(D  T ) / (P(D  T ) + P(D  T)
T) ))
cc cc cc

== 0.8
0.8 xx (1-0.7)/(0.8
(1-0.7)/(0.8 xx (1-0.7)+(1-.8)
(1-0.7)+(1-.8) xx 0.7)
0.7)
== .63
.63
Note 5 of 5E
 Random Variables
• A quantitative variable x is a random variable if
the value that it assumes, corresponding to the
outcome of an experiment is a chance or random
event.
• Random variables can be discrete or
continuous.
• Examples:
x = SAT score for a randomly selected student
x = number of people in a room at a randomly
selected time of day
x = number on the upper face of a randomly
tossed die Note 5 of 5E
Probability Distributions for
Discrete Random Variables
The probability distribution for a discrete
random variable x resembles the relative
frequency distributions we constructed in
Chapter 2. It is a graph, table or formula that
gives the possible values of x and the
probability p(x) associated with each value.

We
We must
musthave
have
00 pp((xx))11and
and  pp((xx))11
Note 5 of 5E
 Example
Toss a fair coin three times and
define x = number of heads.
x x p(x)
HHH
HHH
1/8 3 P(x
P(x == 0)
0) == 1/8
1/8 0 1/8
HHT
HHT
1/8
P(x
P(x == 1)
1) == 3/8
3/8 1 3/8
2
HTH
HTH P(x
P(x == 2)
2) == 3/8
3/8 2 3/8
1/8 2 P(x
THH
THH
P(x == 3)
3) == 1/8
1/8 3 1/8
1/8 2
HTT
HTT 1/8 1 Probability
Probability
THT
THT Histogram
1/8 1 Histogramfor
forxx
TTH
TTH 1/8 1
TTT
TTT 1/8 0 Note 5 of 5E
 Example
Toss two dice and define
x = sum of two dice. x p(x)

2 1/36
3 2/36
4 3/36
5 4/36
6 5/36
7 6/36
8 5/36
9 4/36
10 3/36
11 2/36
Note 5 of 5E
12 1/36
 Probability Distributions
Probability distributions can be used to describe
the population, just as we described samples in
Chapter 2.
– Shape: Symmetric, skewed, mound-shaped…
– Outliers: unusual or unlikely measurements
– Center and spread: mean and standard
deviation. A population mean is called  and a
population standard deviation is called 

Note 5 of 5E
 The Mean
and Standard Deviation
Let x be a discrete random variable with
probability distribution p(x). Then the
mean, variance and standard deviation of x
are given as
Mean::  
Mean xpxp((xx))
Variance ::  ((xx)) pp((xx))
22 22
Variance

deviation::  
22
Standard
Standarddeviation
Note 5 of 5E
 Example
Toss a fair coin 3 times and
record x the number of heads.
x p(x) xp(x) (x-2p(x) 12
   xp ( x )  12  1.5
0 1/8 0 (-1.5)2(1/8)    xp( x )  8  1.5
8
1 3/8 3/8 (-0.5)2(3/8)
2 3/8 6/8 (0.5)2(3/8)
  
22
((xx)) pp((xx))
22
3 1/8 3/8 (1.5) (1/8)
2

 ..28125
22
28125..09375
09375..09375
09375..28125
28125..75
75
  ..75
75 ..688
688
Note 5 of 5E
 Example
The probability distribution for x the
number of heads in tossing 3 fair coins.

Symmetric;
• Shape? mound-shaped
• Outliers? None
• Center?  = 1.5
• Spread?  = .688


Note 5 of 5E
 Key Concepts
I. Experiments and the Sample Space
1. Experiments, events, mutually exclusive events,
simple events
2. The sample space

II. Probabilities
1. Relative frequency definition of probability
2. Properties of probabilities
a. Each probability lies between 0 and 1.
b. Sum of all simple-event probabilities equals 1.
3. P(A), the sum of the probabilities for all simple events in A
Note 5 of 5E
 Key Concepts
III. Counting Rules
1. mn Rule; extended mn Rule
2. Permutations: Prn  n!
(n  r )!
n!
Crn 
3. Combinations: r!(n  r )!
IV. Event Relations
1. Unions and intersections
2. Events
a. Disjoint or mutually exclusive: P(A B)  0
b. Complementary: P(A)  1  P(AC )
Note 5 of 5E
 Key Concepts
P( A  B)
P( A | B) 
3. Conditional probability: P( B)
4. Independent and dependent events
5. Additive Rule of Probability:
P( A  B)  P( A)  P( B)  P( A  B)

6. Multiplicative Rule of Probability:

P ( A  B )  P ( A) P ( B | A)

7. Law of Total Probability

8. Bayes’ Rule
Note 5 of 5E
 Key Concepts
V. Discrete Random Variables and Probability
Distributions
1. Random variables, discrete and continuous
2. Properties of probability distributions
00 pp((xx))11and
and pp((xx))11
3. Mean or expected value of a discrete random
Mean:: xp
variable: Mean xp((xx))
4. Variance and standard deviation of a discrete
random variable: Variance :  22
  ( x   ) 22
Variance :   ( x   ) pp((xx))
Standard deviation :   
Standard deviation :   
22

Note 5 of 5E