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This module introduces the multiplication and addition rules used when calculating probabilities.

The multiplication rule

If A and B are two events defined on a sample space , then: P(A AND B) = P(B) P(A|B) .

This rule may also be written as : P(A|B)= P(A AND B) P(B)

(The probability of A given B equals the probability of A and B divided by the probability of B .)

If A and B are independent , then P(A|B) = P(A) . Then P(A AND B) = P(A|B) P(B) becomes P(A AND B) = P(A) P(B) .

The addition rule

If A and B are defined on a sample space, then: P(A OR B) = P(A) + P(B) - P(A AND B) .

If A and B are mutually exclusive , then P(A AND B) = 0 . Then P(A OR B) = P(A) + P(B) - P(A AND B) becomes P(A OR B) = P(A) + P(B) .

Klaus is trying to choose where to go on vacation. His two choices are: A = New Zealand and B = Alaska

  • Klaus can only afford one vacation. The probability that he chooses A is P(A) = 0.6 and the probability that he chooses B is P(B) = 0.35 .
  • P(A and B) = 0 because Klaus can only afford to take one vacation
  • Therefore, the probability that he chooses either New Zealand or Alaska is P(A OR B) = P(A) + P(B) = 0.6 + 0.35 = 0.95 . Note that the probability that he does not choose to go anywhere on vacation must be 0.05 .
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Carlos plays college soccer. He makes a goal 65% of the time he shoots. Carlos is going to attempt two goals in a row in the next game.

A = the event Carlos is successful on his first attempt. P(A) = 0.65 . B = the event Carlos is successful on his second attempt. P(B) = 0.65 . Carlos tends to shoot in streaks. The probability that he makes the second goal GIVEN that he made the first goal is 0.90.

What is the probability that he makes both goals?

The problem is asking you to find P(A AND B) = P(B AND A) . Since P(B|A) = 0.90 :

P(B AND A) = P(B|A) P(A)  =  0.90 * 0.65 = 0.585

Carlos makes the first and second goals with probability 0.585.

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What is the probability that Carlos makes either the first goal or the second goal?

The problem is asking you to find P(A OR B) .

P(A OR B) = P(A) + P(B) - P(A AND B) = 0.65 + 0.65 - 0.585 = 0.715

Carlos makes either the first goal or the second goal with probability 0.715.

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Are A and B independent?

No, they are not, because P(B AND A)  =  0.585 .

P(B)  ⋅  P(A)  =  (0.65)  ⋅  (0.65)  =  0.423
0.423  ≠  0.585  =  P(B AND A)

So, P(B AND A) is not equal to P(B) P(A) .

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Are A and B mutually exclusive?

No, they are not because P(A and B) = 0.585.

To be mutually exclusive, P(A AND B) must equal 0.

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A community swim team has 150 members. Seventy-five of the members are advanced swimmers. Forty-seven of the members are intermediate swimmers. The remainder are novice swimmers. Forty of the advanced swimmers practice 4 times a week. Thirty of the intermediate swimmers practice 4 times a week. Ten of the novice swimmers practice 4 times a week. Suppose one member of the swim team is randomly chosen. Answer the questions (Verify the answers):

What is the probability that the member is a novice swimmer?

28 150

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What is the probability that the member practices 4 times a week?

80 150

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What is the probability that the member is an advanced swimmer and practices 4 times a week?

40 150

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What is the probability that a member is an advanced swimmer and an intermediate swimmer? Are being an advanced swimmer and an intermediate swimmer mutually exclusive? Why or why not?

P(advanced AND intermediate)  =  0 , so these are mutually exclusive events. A swimmer cannot be an advanced swimmer and an intermediate swimmer at the same time.

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Are being a novice swimmer and practicing 4 times a week independent events? Why or why not?

No, these are not independent events.

P(novice AND practices 4 times per week) = 0.0667
P(novice) P(practices 4 times per week) = 0.0996
0.0667 0.0996
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Studies show that, if she lives to be 90, about 1 woman in 7 (approximately 14.3%) will develop breast cancer. Suppose that of those women who develop breast cancer, a test is negative 2% of the time. Also suppose that in the general population of women, the test for breast cancer is negative about 85% of the time. Let B = woman develops breast cancer and let N = tests negative. Suppose one woman is selected at random.

What is the probability that the woman develops breast cancer? What is the probability that woman tests negative?

P(B) = 0.143 ; P(N) = 0.85

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Given that the woman has breast cancer, what is the probability that she tests negative?

P(N|B) = 0.02

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What is the probability that the woman has breast cancer AND tests negative?

P(B AND N) = P(B) ⋅ P(N|B) = ( 0.143 )  ⋅  ( 0.02 ) = 0.0029

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What is the probability that the woman has breast cancer or tests negative?

P(B OR N) = P(B) + P(N) - P(B AND N) = 0.143 + 0.85 - 0.0029 = 0.9901

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Are having breast cancer and testing negative independent events?

No. P(N) = 0.85 ; P(N|B) = 0.02 . So, P(N|B) does not equal P(N)

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Are having breast cancer and testing negative mutually exclusive?

No. P(B AND N) = 0.0029 . For B and N to be mutually exclusive, P(B AND N) must be 0.

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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, Collaborative statistics. OpenStax CNX. Jul 03, 2012 Download for free at http://cnx.org/content/col10522/1.40
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