Business Statistics Chapter 4

mutually exclusive

events are called this if they do not share any common outcome of an experiment

experiment

a process that leads to one of several possible outcomes

event

any subset of outcomes of the experiment

sample space

contains all possible outcomes of the experiment

exhaustive

events are called this if all possible outcomes of an experiment belong to the events

contingency table

generally shows frequencies for two qualitative variables, x and y, where each cell represents a mutually exclusive combination of the pair of x and y values

law of large numbers

law that says that the empirical probability approaches the classical probability if the experiment is run a very large number of times

probability

numerical value that measures the likelihood that an event occurs. This value is between zero and one, where a value of zero indicates impossible events and a value of one indicates definite events

joint probabilities

probabilities of the intersection of two events

subjective probability

probability calculated by drawing on personal and subjective judgment

classical probability

probability that is based on logical analysis rather than on observation or personal judgment

empirical probability

probability that is calculated as a relative frequency of occurrence

total probability rule

rule that expresses the probability of an event, A, in terms of probabilities of the intersection of A with any mutually exclusive and exhaustive events.

complement rule

rule that states that the probability of the complement of an event is equal to one minus the probability of the event

multiplication rule

rule that states that the probability that A and B bot occur is equal to the probability that A occurs given that B has occurred times the probability that B occurs

addition rule

rule that states that the probability that A or B occurs, or that at least one of these events occurs, is equal to the probability that both A and B occur

joint probability table

table in which the frequency in each cell is divided by the number of outcomes in the sample space

union

the _____ of two events is the event consisting of all outcomes in A or B

intersection

the ______ of two events is the event consisting of all outcomes in A and B

complement

the _______ of an event A is the event consisting of all outcomes in sample space S that are not in A

combination formula

the number of ways to choose x objects from a total of n objects, where the order in which the x objects are listed does not matter, is calculated using the _________ ________

permutation formula

the number of ways to choose x objects from a total of n objects, where the order in which the x objects is listed does matter, is calculated using the _________ _______

independent

two events are ________ if the occurrence of one event does not affect the probability of the occurrence of another event

conditional probability

where the probability of an event is conditional on the occurrence of another event