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This module introduces the concept of Probability, the chance of an event occurring.

Student learning objectives

By the end of this chapter, the student should be able to:

  • Understand and use the terminology of probability.
  • Determine whether two events are mutually exclusive and whether two events are independent.
  • Construct and interpret Contingency Tables.

Introduction

It is often necessary to "guess" about the outcome of an event in order to make a decision. Politicians study polls to guess their likelihood of winning an election. Teachers choose aparticular course of study based on what they think students can comprehend. Doctors choose the treatments needed for various diseases based on their assessment of likely results. You may have visited a casino wherepeople play games chosen because of the belief that the likelihood of winning is good. You may have chosen your course of study based on the probable availability of jobs.

You have, more than likely, used probability. In fact, you probably have an intuitive sense of probability. Probability deals with the chance of an event occurring. Whenever you weigh theodds of whether or not to do your homework or to study for an exam, you are using probability. In this chapter, you will learn to solve probability problems using a systematicapproach.

Optional collaborative classroom exercise

Your instructor will survey your class. Count the number of students in the class today.

  • Raise your hand if you have any change in your pocket or purse. Record the number of raised hands.
  • Raise your hand if you rode a bus within the past month. Record the number of raised hands.
  • Raise your hand if you answered "yes" to BOTH of the first two questions. Record the number of raised hands.

Use the class data as estimates of the following probabilities. P(change) means the probability that a randomly chosen person in your class has change in his/her pocket or purse. P(bus) means the probability that a randomly chosen person in your class rode a bus within the last month and so on. Discuss your answers.

  • Find P(change) .
  • Find P(bus) .
  • Find P(change and bus) Find the probability that a randomly chosen student in your class has change in his/her pocket or purse and rode a bus within the last month.
  • Find P(change| bus) Find the probability that a randomly chosen student has change given that he/she rode a bus within the last month. Count all the students that rode a bus. Fromthe group of students who rode a bus, count those who have change. The probability is equal to those who have change and rode a bus divided by those who rode a bus.

Questions & Answers

Ayele, K., 2003. Introductory Economics, 3rd ed., Addis Ababa.
Widad Reply
can you send the book attached ?
Ariel
?
Ariel
What is economics
Widad Reply
the study of how humans make choices under conditions of scarcity
AI-Robot
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn Reply
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn
what is ecnomics
Jan Reply
this is the study of how the society manages it's scarce resources
Belonwu
what is macroeconomic
John Reply
macroeconomic is the branch of economics which studies actions, scale, activities and behaviour of the aggregate economy as a whole.
husaini
etc
husaini
difference between firm and industry
husaini Reply
what's the difference between a firm and an industry
Abdul
firm is the unit which transform inputs to output where as industry contain combination of firms with similar production 😅😅
Abdulraufu
Suppose the demand function that a firm faces shifted from Qd  120 3P to Qd  90  3P and the supply function has shifted from QS  20  2P to QS 10  2P . a) Find the effect of this change on price and quantity. b) Which of the changes in demand and supply is higher?
Toofiq Reply
explain standard reason why economic is a science
innocent Reply
factors influencing supply
Petrus Reply
what is economic.
Milan Reply
scares means__________________ends resources. unlimited
Jan
economics is a science that studies human behaviour as a relationship b/w ends and scares means which have alternative uses
Jan
calculate the profit maximizing for demand and supply
Zarshad Reply
Why qualify 28 supplies
Milan
what are explicit costs
Nomsa Reply
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials
AI-Robot
concepts of supply in microeconomics
David Reply
economic overview notes
Amahle Reply
identify a demand and a supply curve
Salome Reply
i don't know
Parul
there's a difference
Aryan
Demand curve shows that how supply and others conditions affect on demand of a particular thing and what percent demand increase whith increase of supply of goods
Israr
Hi Sir please how do u calculate Cross elastic demand and income elastic demand?
Abari
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Source:  OpenStax, Elementary statistics. OpenStax CNX. Dec 30, 2013 Download for free at http://cnx.org/content/col10966/1.4
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