SBE11E Chapter 04

Chapter4
IntroductiontoProbability
LearningObjectives
1.
Obtainanappreciationoftheroleprobabilityinformationplaysinthedecisionmakingprocess.
2.
Understandprobabilityasanumericalmeasureofthelikelihoodofoccurrence.
3.
Knowthethreemethodscommonlyusedforassigningprobabilitiesandunderstandwhenthey
shouldbeused.
4.
Knowhowtousethelawsthatareavailableforcomputingtheprobabilitiesofevents.
5.
Understandhownewinformationcanbeusedtoreviseinitial(prior)probabilityestimatesusing
Bayestheorem.
41
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May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter4
Solutions:
1.
NumberofexperimentalOutcomes=(3)(2)(4)=24
2.
6
6!
6 5 4 3 21
20

3
3!3!
(3
2 1)(3
2 1)

ABC
ABD
ABE
ABF
ACD
P36
3.
ACE
ACF
ADE
ADF
AEF
BCD
BCE
BCF
BDE
BDF
BEF
CDE
CDF
CEF
DEF
6!
(6)(5)(4) 120
(6 3)!
BDFBFDDBFDFBFBDFDB
4.
a.
1stToss
2ndToss
3rdToss
H
H
T
H
T
H
T
H
T
H
T
T
H
T
b.
(H,H,H)
(H,H,T)
(H,T,H)
(H,T,T)
(T,H,H)
(T,H,T)
(T,T,H)
(T,T,T)
Let:HbeheadandTbetail
(H,H,H) (T,H,H)
(H,H,T) (T,H,T)
(H,T,H) (T,T,H)
(H,T,T) (T,T,T)
c.
5.
Theoutcomesareequallylikely,sotheprobabilityofeachoutcomeis1/8.
P(Ei)=1/5fori=1,2,3,4,5
P(Ei)0fori=1,2,3,4,5
42

P(E1)+P(E2)+P(E3)+P(E4)+P(E5)=1/5+1/5+1/5+1/5+1/5=1
Theclassicalmethodwasused.
6.
P(E1)=.40,P(E2)=.26,P(E3)=.34
Therelativefrequencymethodwasused.
7.
8.
No.Requirement(4.4)isnotsatisfied;theprobabilitiesdonotsumto1.P(E1)+P(E2)+P(E3)+
P(E4)=.10+.15+.40+.20=.85
a.
Therearefouroutcomespossibleforthis2stepexperiment;planningcommissionpositive
councilapproves;planningcommissionpositivecouncildisapproves;planningcommission
negativecouncilapproves;planningcommissionnegativecouncildisapproves.
b.
Let
p=positive,n=negative,a=approves,andd=disapproves
PlanningCommission
Council
a
(p,a)
d
p
(p,d)
n
a
(n,a)
d
(n,d)
9.
50
50!
50 49 48 47
230,300

4
4!46!
4
2
1
10. a.
Using the table provided, 94% of students graduating from Morehouse College have debt.
P(Debt) = .94
b. Five of the 8 institutions have over 60% of their graduates with debt.
43

Chapter4
P(over 60%) = 5/8 = .625
c. Two of the 8 institutions have graduates with debt who have an average debt more than $30,000.
P(more than $30,000) = 2/8 = .25
d. P(No debt) = 1 - P(Debt) = 1 - .72 = .28
e. This is a weighted average calculation. 72% graduate with an average debt of $32,980 and 28%
graduate with a debt of $0.
Average debt per graduate =
11. a.
.72($32,980) .28($0)
= $23,746
.72 .28
Totaldrivers=858+228=1086
P(Seatbelt)=
858
.79 or79%
1086
b.
Yes,theoverallprobabilityisupfrom.75to.79,or4%,inoneyear.Thus.79doesexceedhis.78
expectation.
c.
Northeast
148
.74
200
Midwest
162
.75
216
South
296
.80
370
West
252
.84
300
TheWestwith.84showsthehighestprobabilityofuse.
d.
Probabilityofselectionbyregion:
Northeast
200
.1842
1086
Midwest
216
.1989
1086
South
370
.3407
1086
West
300
.2762
1086
Southhasthehighestprobability(.3407)andWestwassecond(.2762).
44

e.
Yes,.3407forSouth+.2762forWest=.6169showsthat61.69%ofthesurveycamefromthetwo
highestusageregions.The.79probabilitymaybealittlehigh.
Ifequalnumbersforeachregion,theoverallprobabilitywouldhavebeenroughly
.74 .75 .80 .84
.7825
4
Althoughperhapsslightlylower,the.7825to.79usageprobabilityisaniceincreaseovertheprior
year.
12. a.
Usethecountingruleforcombinations:
55
55!
(55)(54)(53)(52)(51)
3, 478, 761

5
5!50!
(5)(4)(3)(2)(1)

Onechancein3,489,761
b.
Verysmall:1/3,478,761=.000000287
c.
Multiplytheanswerinpart(a)by42togetthenumberofchoicesforthesixnumbers.
NumberofChoices=(3,478,761)(42)=146,107,962
ProbabilityofWinning=1/146,107,962=.00000000684
13.
Initiallyaprobabilityof.20wouldbeassignedifselectionisequallylikely.Datadoesnotappear
toconfirmthebeliefofequalconsumerpreference.Forexampleusingtherelativefrequency
methodwewouldassignaprobabilityof5/100=.05tothedesign1outcome,.15todesign2,.30to
design3,.40todesign4,and.10todesign5.
14. a.
P(E2)=1/4
b.
P(any2outcomes)=1/4+1/4=1/2
c.
P(any3outcomes)=1/4+1/4+1/4=3/4
15. a.
S={aceofclubs,aceofdiamonds,aceofhearts,aceofspades}
b.
S={2ofclubs,3ofclubs,...,10ofclubs,Jofclubs,Qofclubs,Kofclubs,Aofclubs}
c.
Thereare12;jack,queen,orkingineachofthefoursuits.
d.
Fora:4/52=1/13=.08
Forb:13/52=1/4=.25
Forc:12/52=.23
45

Chapter4
16. a.
(6)(6)=36samplepoints
b.
Die2
1
10
10
11
10
11
12
TotalforBoth
Die1
c.
6/36=1/6
d.
10/36=5/18
e.
No.P(odd)=18/36=P(even)=18/36or1/2forboth.
f.
Classical.Aprobabilityof1/36isassignedtoeachexperimentaloutcome.
17. a.
(4,6),(4,7),(4,8)
b.
.05+.10+.15=.30
c.
(2,8),(3,8),(4,8)
d.
.05+.05+.15=.25
e.
.15
46

18. a.
b.
P(nomeals)=
11
=.0222
496
P(atleastfourmeals) =P(4)+P(5)+P(6)+P(7ormore)
=
c.
36 119 114 139
=.8226
496 496 496 496
P(twoorfewermeals)
=
=P(2)+P(1)+P(0)
30
11
11
=.1048
496 496 496
19. a/b. Usetherelativefrequencyapproachtoassignprobabilities.Foreachsportactivity,dividethe

numberofmaleandfemaleparticipantsbythetotalnumberofmalesandfemalesrespectively.
Activity
BicycleRiding
Camping
ExerciseWalking
ExercisingwithEquipment
Swimming
c.
P(ExerciseWalking)=
d.
P(Woman)=
P(Man)=
Male
.18
.21
.24
.17
.22
Female
.16
.19
.45
.19
.27
(28.7 57.7)
.35
248.5
57.7
.67
(28.7 57.7)
28.7
.33
(28.7 57.7)
20. a.
P(N)=54/500=.108
b.
P(T)=48/500=.096
c.
Totalin5states=54+52+48+33+30=217
P(B)=217/500=.434
AlmosthalftheFortune500companiesareheadquarteredinthesefivestates.
21. a.
Usetherelativefrequencymethod.Dividebythetotaladultpopulationof227.6million.
Age
18to24
Number
29.8
Probability
0.1309
47

Chapter4
b.
25to34
40.0
35to44
43.4
45to54
43.9
55to64
32.7
65andover
37.8
Total
227.6
P(18to24)=.1309
c.
P(18to34)=.1309+.1757=.3066
d.
P(45orolder)=.1929+.1437+.1661=.5027
22. a.
0.1757
0.1907
0.1929
0.1437
0.1661
1.0000
P(A)=.40,P(B)=.40,P(C)=.60
b.
P(AB)=P(E1,E2,E3,E4)=.80.YesP(AB)=P(A)+P(B).
c.
Ac={E3,E4,E5}Cc={E1,E4}P(Ac)=.60P(Cc)=.40
d.
ABc={E1,E2,E5}P(ABc)=.60
e.
P(BC)=P(E2,E3,E4,E5)=.80
23. a.
P(A) =P(E1)+P(E4)+P(E6)=.05+.25+.10=.40
P(B)=P(E2)+P(E4)+P(E7)=.20+.25+.05=.50
P(C)=P(E2)+P(E3)+P(E5)+P(E7)=.20+.20+.15+.05=.60
b.
AB={E1,E2,E4,E6,E7}
P(AB) =P(E1)+P(E2)+P(E4)+P(E6)+P(E7)
=.05+.20+.25+.10+.05=.65
c.
AB={E4}P(AB)=P(E4)=.25
d.
Yes,theyaremutuallyexclusive.
e.
Bc={E1,E3,E5,E6};P(Bc)
24.
=P(E1)+P(E3)+P(E5)+P(E6)
=.05+.20+.15+.10=.50
Let E=experienceexceededexpectations
M=experiencemetexpectations
a.
Percentageofrespondentsthatsaidtheirexperienceexceededexpectations
=100(4+26+65)=5%
P(E)=.05
b.
25.
P(ME)=P(M)+P(E)=.65+.05=.70
Let M =maleyoungadultlivinginhisparentshome
F = femaleyoungadultlivinginherparentshome
48

a.
P(MF) =P(M)+P(F)P(MF)
=.56+.42.24=.74
b.
1P(MF)=1.74=.26
26. a.
Let D=DomesticEquityFund
P(D)=16/25=.64
b. Let A=4or5starrating
13 funds were rated 3-star of less; thus, 25 13 = 12 funds must be 4-star or 5-star.
P(A)=12/25=.48
c.
7DomesticEquityfundswererated4starand2wererated5star.Thus,9fundswereDomestic
Equityfundsandwererated4staror5star
P(DA)=9/25=.36
d.
P(DA) =P(D)+P(A)P(DA)
=.64+.48.36=.76
27.
Let
A=theeventtheACChasateaminthechampionshipgame
S=theeventtheSEChasateaminthechampionshipgame
a.
P( A)
10
.50
20
b.
P(S )
8
.40
20
c.
P( A S )
1
.05
20
ThereisalowprobabilitythatteamsfromboththeACCandSECwillbeinthechampionship
game.
d.
P ( A S ) P ( A) P ( S ) P ( A S ) .50 .40 .05 .85

ThereisahighprobabilitythatateamfromtheACCorSECwillbeinthechampionshipgame.
e.
P(Neitherconference)= 1 P ( A S ) 1 .85 .15

In this case, teams will most likely come from the Big Ten (6), Big East (4), Pac-10 (4), or Big 12
(3). Numbers shown are the number of times teams from these conferences have played in the
national championship game over the previous 20 years.
49

Chapter4
28.
Let: B=rentedacarforbusinessreasons
P=rentedacarforpersonalreasons
a.
P(BP) =P(B)+P(P)P(BP)
=.54+.458.30=.698
b.
P(Neither)=1.698=.302
29. a.
P(E)=
1033
.3623
2851
P(R)=
854
.2995
2851
P(D)=
964
.3381
2851
b.
Yes;P(ED)=0
c.
Probability=
d.
LetFdenotetheeventthatastudentwhoappliesforearlyadmissionisdeferredandlateradmitted
duringtheregularadmissionprocess.
1033
.4349
2375
EventsEandFaremutuallyexclusiveandtheadditionlawapplies.
P(EF)=P(E)+P(F)
P(E)=.3623frompart(a)
Ofthe964earlyapplicantswhoweredeferred,weexpect18%,or.18(964)students,tobeadmitted
duringtheregularadmissionprocess.Thus,forthetotalof2851earlyadmissionapplicants
P(F)=
.18(964)
.0609
2851
P(EF)=P(E)+P(F)=.3623+.0609=.4232
Note:.18(964)=173.52.Somestudentsmayroundthisto174students.Ifroundingisdone,the
answerbecomes.4233.Eitherapproachisacceptable.
30. a.
P (A B)
P (A B) .40
.6667
P (B)
.60
b.
P (B A)
P (A B) .40
.80
P (A)
.50
410

c.
31. a.
NobecauseP(A|B)P(A)
P(AB)=0
P (A B) 0
0
P (B)
.4
b.
P (A B)
c.
No.P(A|B)P(A);theevents,althoughmutuallyexclusive,arenotindependent.
d.
Mutuallyexclusiveeventsaredependent.
32. a.
Rowandcolumnsumsareshown.
U.S.
Non U.S.
Total
Car
87.4
228.5
315.9
Light Truck
193.1
148.0
341.1
Total
280.5
376.5
657.0
Atotalof657.0thousandvehiclesweresold.
Dividingeachentryinthetableby657.0providesthefollowingjointprobabilitytable.
b.
Car
Light Truck
U.S.
.1330
.2939
Non U.S.
.3478
.2253
Total
.4808
.5192
Let U = U.S.manufacturer
N = NonU.S.manufacturer
C = Car
L =LightTruck
Total
.4269
.5731
1.0000
Marginalprobabilities:P(U)=.4269P(B)=.5731
ThereisahigherprobabilitythatthevehiclewasnotmanufacturedbyaU.S.automaker.Interms
ofmarketshare,nonU.S.automakersleadwitha57.3%shareofvehiclesales.
Marginalprobabilities:P(C)=.4808P(L)=.5192
Thelighttruckcategorywhichincludespickup,minivans,SUVsandcrossovermodelshasa
slightly
higherprobability.Butthetypesofvehiclesarefairlyevensplit.
c.
P (C U )
P (C U ) .1330
P ( L U ) .2939
.3115 P( L U )
.6885
P (U )
.4269
P (L)
.4269
IfavehiclewasmanufacturedbyoneoftheU.S.automakers,thereisahigherprobabilityitwillbe
inthelighttruckcategory.
d.
P (C N )
P (C N ) .3478
P( L N ) .2253
.6069 P ( L N )
.3931
P (N )
.5731
P(L)
.5731
IfavehiclewasnotmanufacturedbyoneoftheU.S.automakers,thereisahigherprobabilityit
willbeacar.
411

Chapter4
e.
P (U L)
P (U L) .2939
.5661
P (L)
.5192
Ifavehiclewasalighttruck,thereisbetterthana5050chancethatitwasmanufacturedbyoneof
theU.S.automakers.
f.
Thereisahigherprobability,andthusalargermarketsharefornonU.S.automakers.However,
theU.S.automakersareleadersinsalesforthelighttruckcategory.
33. a.
FullTime
PartTime
Quality
.218
.208
.426
ReasonforApplying
Cost/Convenience
.204
.307
.511
Other
.039
.024
.063
Total
.461
.539
1.000
b.
Itismostlikelyastudentwillcitecostorconvenienceasthefirstreasonprobability=.511.
Schoolqualityisthefirstreasoncitedbythesecondlargestnumberofstudentsprobability=.426.
c.
P(Quality|fulltime)=.218/.461=.473
d.
P(Quality|parttime)=.208/.539=.386
e.
Forindependence,wemusthaveP(A)P(B)=P(AB).
Fromthetable,P(AB)=.218,P(A)=.461,P(B)=.426
P(A)P(B)=(.461)(.426)=.196
BecauseP(A)P(B)P(AB),theeventsarenotindependent.
34. a.
Let O
Oc
S
U
J
=
=
=
=
=
flightarrivesontime
flightarriveslate
Southwestflight
USAirwaysflight
JetBlueflight
Given: P(O|S)=.834
P(S)=.40
P(O|S)=
P(O|U)=.751
P(O|J)=.701
P(U)=.35
P(J)=.25
P (O S)
P(S)
P(OS)=P(O|S)P(S)=(.834)(.4)=.3336
Similarly
412

P(OU)=P(O|U)P(U)=(.751)(.35)=.2629
P(OJ)=P(O|J)P(J)=(.701)(.25)=.1753
Jointprobabilitytable
Southwest
USAirways
JetBlue
Total:
Ontime
.3336
.2629
.1753
.7718
Late
.0664
.0871
.0747
.2282
Total
.40
.35
.25
1.00
b.
SouthwestAirlines;P(S)=.40
c.
P(O)=P(SO)+P(UO)+P(JO)=.3336+.2629+.1753=.7718
P(S Oc ) .0664
P (S Oc )
.2910
P (Oc )
.2282
d.
Similarly, P (U Oc )
P (J Oc )
.0871
.3817
.2282
.0747
.3273
.2282
MostlikelyairlineisUSAirways;leastlikelyisSouthwest
35. a.
The total sample size is 200. Dividing each entry by 200 provides the following joint probability
table.
Pay Rent
Yes
Yes
.28
No
.26
.07
.35
.39
.65
.54
Buy a Car
No
b.
.46
Let C = the event of financial assistance to buy a car

R = the event of financial assistance to pay rent
Using the marginal probabilities, P(C) = .54 and P(R) = .35. Parents are more likely to provide
their adult children with financial assistance to buy a car. The probability of financial assistance to
buy a car is .54 and the probability of financial assistance to pay rent is .35.
P ( R C ) .28
.5185
P (C )
.54
c.
P (R C )
d.
P( R C C )
e.
Financialassistancetobuyacarisnotindependentoffinancialassistancetopayrent,
P( R C ) P( R) .
P ( R C C ) .07
.1522
P(C C )
.46
413

Chapter4
Ifthereisfinancialassistancetobuyacar,theprobabilityoffinancialassistancetopayrent
increasesfrom.35to.5185.However,ifthereisnofinancialassistancetobuyacar,theprobability
offinancialassistancetopayrentdecreasesfrom.35to.1522.
f.
36. a.
P(C R ) P(C ) P ( R ) P ( R C ) .54 .35 .28 .61
Let A=makes1stfreethrow
B=makes2ndfreethrow
Assumingindependence,P(AB)=P(A)P(B)=(.89)(.89)=.7921
b.
P(AB)=P(A)+P(B)P(AB)=(.89)(.89).7921=.9879
c.
d.
P(MissBoth)=1P(atleastone)=1.9878=.0121
ForthisplayeruseP(A)=.58
P(AB)=(.58)(.58)=.3364
P(AB)=.58+.58.3364=.8236
P(MissBoth)=1.8236=.1764
TheprobabilityJerryStackhousemakesbothfreethrowsis.7921,whilethecenter'sprobabilityis.
3364.TheprobabilityJerryStackhousemissesbothfreethrowsisonly.0121,whilethecenter's
probabilityisamuchhigher,.1764.Theopponent'sstrategyshouldbetofoulthecenterandnot
JerryStackhouse.
37.
Let C = event consumer uses a plastic card

B = event consumer is 18 to 24 years old
Bc = event consumer is over 24 years old
Given information:
P (C) .37
P (B C) .19
P (Bc C) .81
P (B) .14
a.
P (C B)
P (C B)
P (B)
but P(C B) is unknown. So first compute

P (C B) P(C) P(B C)
.37(.19) .0703
Then
414

P (C B)
b.
P (C B) .0703
.5021
P (B)
.14
P (C Bc )
P(C Bc )
P (Bc )
but P(C Bc ) and P(Bc ) are unknown. However, they can be computed as follows.
P (C Bc ) P(C)P(Bc C)
.37(.81) .2997
P (Bc ) 1- P(B) 1 .14 .86
Then
P (C Bc )
P(C Bc ) .2997
.3485
P (Bc )
.86
c. There is a higher probability that the younger consumer, age 18 to 24, will use plastic when
making a purchase. The probability that the 18 to 24 year old consumer uses plastic is .5021
and the probability that the older than 24 year old consumer uses plastic is .3485. Note that
there is greater than .50 probability that the 18 to 24 years old consumer will use plastic.
d. Companies such as Visa, Mastercard and Discovery want their cards in the hands of
consumers who will have a high probability of using the card. So yes, these companies
should get their cards in the hands of young consumers even before these consumers have
established a credit history. The companies should place a low limit of the amount of credit
charges until the young consumer has demonstrated the responsibility to handle higher credit
limits.
38.
Let M = event consumer is a man

Let W = event consumer is a woman
Let B = event preferred plain bottled water
Let S = event preferred sports drink
a.
P(B) = 280/400 = .70
b.
Sports drink: 80 + 40 = 120

P(S) = 120/400 = .30
c.
P (M S) = 80/120 = .67
P (W S) = 40/120 = .33
d.
P (S) P (M S) = .30(.67) = .20

P (S) P (W S) = .30(.33) = .10
e.
P(M) =.50
415

Chapter4
P (S M)
f.
P(W) = .50
P (S W)
g.
P(M S) .20
.40
P (M)
.50
P (W S) .10
.20
P(W)
.50
No;
P (S M) P(S)
P (S W) P(S)
39. a.
b.
Yes,sinceP(A1A2)=0
P(A1B)=P(A1)P(B|A1)=.40(.20)=.08
P(A2B)=P(A2)P(B|A2)=.60(.05)=.03
c.
P(B)=P(A1B)+P(A2B)=.08+.03=.11
d.
P (A1 B)
.08
.7273
.11
P (A 2 B)
.03
.2727
.11
40. a.
P(BA1)=P(A1)P(B|A1)=(.20)(.50)=.10
P(BA2)=P(A2)P(B|A2)=(.50)(.40)=.20
P(BA3)=P(A3)P(B|A3)=(.30)(.30)=.09
b.
P (A 2 B)
.20
.51
.10 .20 .09
c.
Events
A1
A2
A3
41.
P(Ai)
.20
.50
.30
1.00
P(B | Ai)
.50
.40
.30
P(Ai B)
.10
.20
.09
.39
P(Ai | B)
.26
.51
.23
1.00
S1=successful,S2=notsuccessfulandB=requestreceivedforadditionalinformation.
a.
P(S1)=.50
b.
P(B|S1)=.75
416

c.
42.
P (S1 B)
(.50)(.75)
.375
.65
(.50)(.75) (.50)(.40) .575
M=missedpayment
D1=customerdefaults
D2=customerdoesnotdefault
P(D1)=.05P(D2)=.95P(M|D2)=.2P(M|D1)=1
P (D1 ) P(M D1 )
P (D1 M)
b.
Yes,theprobabilityofdefaultisgreaterthan.20.
43.
P (D1 ) P(M D1 ) P(D 2 ) P(M D 2 )
(.05)(1)
.05
.21
(.05)(1) (.95)(.2) .24
a.
Let: S=smallcar
Sc = othertypeofvehicle
F = accidentleadstofatalityforvehicleoccupant
WehaveP(S)=.18,soP(Sc)=.82.AlsoP(F|S)=.128andP(F|Sc)=.05.Usingthetabularform
ofBayesTheoremprovides:
Events
S
Sc
Prior
Probabilities
.18
.82
1.00
Conditional
Probabilities
.128
.050
Joint
Probabilities
.023
.041
.064
Posterior
Probabilities
.36
.64
1.00
Fromtheposteriorprobabilitycolumn,wehaveP(S|F)=.36.So,ifanaccidentleadstoafatality,
theprobabilityasmallcarwasinvolvedis.36.
44. a.
b.
P(A1)=.47
P(W|A1)=.50
P(A2)=.53
P(W|A2)=.45
Usingtabularapproach
Events
Graduate
NotaGraduate
Prior
Probabilities
P(Ai)
.47
.53
Conditional
Probability
P(W|Ai)
.50
.45
P(W)=
Joint
Probability
P(AiW)
.2350
.2385
.4735
Posterior
Probability
P(Ai|W)
.4963
.5037
1.0000
Prior
Probabilities
P(Ai)
.47
Conditional
Probability
P(M|Ai)
.50
Joint
Probability
P(AiW)
.2350
Posterior
Probability
P(Ai|M)
.4463
P(Ai|W)=.4963
c.
Events
Graduate
417

Chapter4
NotaGraduate
.53
.45
P(M)=
.2915
.5265
.5537
1.0000
P(Ai|M)=.4463
Abouta.05higherprobabilityawomanstudentwillgraduatecomparedtoaman.
d.
P(W)=.4735
P(M)=.5265
Approximately47%womenand53%men.
45. a.
LetA=age65orolder
P( A) 1 .835 .165
b.
LetD=takesdrugsregularly
P( A D ) =
46. a.
P( A) P( D A)
C
P ( A) P ( D A) P( AC )P (D A )
.165(.82)
.165(.82) .835(.49)
.1353
=.2485
.1353 .4092
LetA=arespondentownsahome
P(A)=1249/2082=.60
b.
LetB=arespondentaged18to34ownsahome
P(B)=117/450=.26
c.
LetAC=arespondentdoesnotownahome
P(AC)=1P(A)=1.60=.40
d.
LetBC=arespondentaged18to34doesnotownahome
P(BC)=1P(B)=1.26=.74
47. a.
b.
(2)(2)=4
Let
S=successful
U=unsuccessful
418

Oi
l
Bonds
S
E1
U
S
E2
U
S
E3
U
E4
c.
O={E1,E2}
M={E1,E3}
d.
OM={E1,E2,E3}
e.
OM={E1}
f.
No;sinceOMhasasamplepoint.
48. a.
b.
Numberfavoringelimination=.47(671) 315
Let F=infavorofproposal
D=Democrat
P(F|D)=.29
c.
P(F)=.47andP(F|D)=.29
SinceP(F)P(F|D)theyarenotindependent.
d.
49.
ExpectRepublicanstobenefitmostbecausetheyaretheoneswhohadthemostpeopleinfavorof
theproposal.
Let
I =treatmentcausedinjury
D =deathfrominjury
N = injurycausedbynegligence
M = malpracticeclaimfiled
$ = paymentmadeinclaim
419

Chapter4
WearegivenP(I)=0.04,P(N|I)=0.25,P(D|I)=1/7,P(M|N)=1/7.5=0.1333,
andP($|M)=0.50
a.
P(N) = P(N|I)P(I)+P(N|Ic)P(Ic)
=(0.25)(0.04)+(0)(0.96)=0.01
b.P(D) = P(D|I)P(I)+P(D|Ic)P(Ic)
=(1/7)(0.04)+(0)(0.96)=0.006
c.
P(M) = P(M|N)P(N)+P(M|Nc)P(Nc)
=(0.1333)(0.01)+(0)(0.99)=0.001333
P($) = P($|M)P(M)+P($|Mc)P(Mc)
=(0.5)(0.001333)+(0)(0.9987)=0.00067
50. a.
Probabilityoftheevent =P(average)+P(aboveaverage)+P(excellent)
=
b.
11 14 13
=.22+.28+.26=.76
50 50 50
Probabilityoftheevent =P(poor)+P(belowaverage)
=
4
8
.24
50 50
51. a.
Education Level
Not H.S. Graduate
H.S. Graduate
Some College
Bachelor's Degree
Beyond Bach. Degree
Total
b.
Under 25
.0571
.0667
.0381
.0120
.0039
.1777
Household Income ($1000)

25-49.9 50-74.9 75-99.9
.0469
.0188
.0073
.0929
.0682
.0358
.0713
.0634
.0441
.0284
.0386
.0350
.0112
.0173
.0168
.2508
.2064
.1390
100 or More
.0050
.0362
.0553
.0729
.0568
.2262
Thisisamarginalprobability.
P(NotH.S.graduate)=.1351
c.
Thisisthesumof2marginalprobabilities.
P(Bachelor'sDegreeBeyondBachelor'sDegree)=.1870+.1061=.2931
d.
e.
Thisisaconditionalprobability.
P (100 or More BD) .0729
P (100 or More BD )
.3898
P (BD)
.1870
Thisisamarginalprobability.
P(Under25)=.1777
420

Total
.1351
.2997
.2721
.1870
.1061
1.0000
f.
Thisisaconditionalprobability.
P (Under 25 BD )
g.
P (Under 25 BD) .0120
.0642
P (BD)
.1870
No. P(100 or More BD) .3898 which is not equal to P(100 or More) = .2262. This is also shown
by comparing the probabilities in parts (e) and (f). Household income is not independent of
education level. Individuals with a Bachelors Degree have a higher probability of having a higher
household income.
52. a.
Yes
No
Total
23andUnder
.1026
.0996
.2022
2426
.1482
.1878
.3360
2730
.0917
.1328
.2245
3135
.0327
.0956
.1283
36andOver
.0253
.0837
.1090
Total
.4005
.5995
1.0000
b.
.2022
c.
.2245+.1283+.1090=.4618
d.
.4005
53. a.
P(24to26|Yes)=.1482/.4005=.3700
b.
P(Yes|36andover)=.0253/.1090=.2321
c.
.1026+.1482+.1878+.0917+.0327+.0253=.5883
d.
P(31ormore|No)=(.0956+.0837)/.5995=.2991
e.
No,becausetheconditionalprobabilitiesdonotallequalthemarginalprobabilities.Forinstance,
P(24to26|Yes)=.3700P(24to26)=.3360
421

Chapter4
54.
Let
I = importantorveryimportant
M = male
F = female
a.
P(I)=.49(amarginalprobability)
b.
P(I|M)=.22/.50=.44(aconditionalprobability)
c.
P(I|F)=.27/.50=.54(aconditionalprobability)
d.
Itisnotindependent
P(I)=.49P(I|M)=.44
and
e.
55. a.
P(I)=.49P(I|F)=.54
Sincelevelofimportanceisdependentongender,weconcludethatmaleandfemalerespondents
havedifferentattitudestowardrisk.
P (B S)
P (B S ) .12
.30
P (S)
.40
WehaveP(B|S)>P(B).
Yes,continuetheadsinceitincreasestheprobabilityofapurchase.
b.
Estimatethecompanysmarketshareat20%.Continuingtheadvertisementshouldincreasethe
marketsharesinceP(B|S)=.30.
c.
P (B S)
P (B S ) .10
.333
P (S)
.30
Thesecondadhasabiggereffect.
56. a.
P(A)=200/800=.25
b.
P(B)=100/800=.125
c.
P(AB)=10/800=.0125
d.
P(A|B)=P(AB)/P(B)=.0125/.125=.10
e.
No,P(A|B)P(A)=.25
57.
Let
A=losttimeaccidentincurrentyear
B=losttimeaccidentpreviousyear
Given:P(B)=.06,P(A)=.05,P(A|B)=.15
a.
P(AB)=P(A|B)P(B)=.15(.06)=.009
422

b.
58.
P(AB) =P(A)+P(B)P(AB)=.06+.05.009=.101or10.1%
Let: B=blogger
Bc=nonblogger
Y=youngadult(1829)
Yc=olderadult
Given: P(B)=.08P(Y|B)=.54P(Y|Bc)=.24
P(Y B)
P (B)
P(Y|B)=
P(YB)=P(Y|B)P(B)=(.54)(.08)=.0432
P(Y|Bc)=
P (Y Bc )
P (Bc )
P(YBc)=P(Y|Bc)P(Bc)=(.24)(.92)=.2208
Blogger
Non
Blogger
Total:
YoungAdult
.0432
.2208
OlderAdult
.0368
.6992
Total
.08
.92
.2640
.7360
1.00
b.
P(Y)=P(BY)+P(BcY)=.0432+.2208=.2640
c.
P(YC)=.0432
d.
P(B|Y)=
P (B Y) .0432
.1636
P(Y)
.2640
59. a.
P(Oil)=.50+.20=.70
b.
LetS=Soiltestresults
Events
High Quality (A1)
Medium Quality (A2)
No Oil (A3)
P(Ai)
.50
.20
.30
1.00
P(S | Ai)
.20
.80
.20
P(Ai S)
.10
.16
.06
P(S) = .32
P(Ai | S)
.31
.50
.19
1.00
P(Oil)=.81whichisgood;however,probabilitiesnowfavormediumqualityratherthanhigh
qualityoil.
60. a.
b.
Let F = female. Using past history as a guide, P(F) = .40.

Let D = Dillard's
423

Chapter4
3
.40
.30
4
P (F D)
.67
.30 .15
3
1
.40 .60
4
4
Therevised(posterior)probabilitythatthevisitorisfemaleis.67.
Weshoulddisplaytheofferthatappealstofemalevisitors.
424


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Chapter4

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36 119 114 139

19. a/b. Usetherelativefrequencyapproachtoassignprobabilities.Foreachsportactivity,dividethe

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2010 Cengage Learning. All Rights Reserved.

P ( A S ) P ( A) P ( S ) P ( A S ) .50 .40 .05 .85

P(Neitherconference)= 1 P ( A S ) 1 .85 .15

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2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

Let C = the event of financial assistance to buy a car

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P(C R ) P(C ) P ( R ) P ( R C ) .54 .35 .28 .61

Let C = event consumer uses a plastic card

but P(C B) is unknown. So first compute

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Let M = event consumer is a man

P(B) = 280/400 = .70

Sports drink: 80 + 40 = 120

P (S) P (M S) = .30(.67) = .20

2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

P (D1 ) P(M D1 ) P(D 2 ) P(M D 2 )

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2010 Cengage Learning. All Rights Reserved.

2010 Cengage Learning. All Rights Reserved.

Household Income ($1000)

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P (Under 25 BD) .0120

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2010 Cengage Learning. All Rights Reserved.

Let F = female. Using past history as a guide, P(F) = .40.

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2010 Cengage Learning. All Rights Reserved.

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