STAT 1430 Recitation 7A Conditional Probability

1. 28% of Fortune 500 companies are laying off employees. Moreover, 18% of those laying off
employees are cutting down on advertising expenses. Of those companies who are not laying
off employees, 11% of them are cutting down on advertising expenses. Let L = Company is
laying off employees, LC= Company is not laying off employees, C = Company is cutting
advertising expenses, and C C = Company is not cutting advertising employees.

a. In the given space, label and find the marginal probability directly given in this problem
AND its complement (which will have to be calculated.)

b. In the given space, label and find all the conditional probabilities directly given in this
problem AND their complements. Some will have to be calculated.

c. Calculate all four of the “and” probabilities that go into the 4 cells of a two-way table. Show
ALL your work for each cell, and put the final answers into the table below. Use probability
notation to make your calculations in the space provided outside the table.
L Lc Total
C
Cc
Total

d. Fill out the rest of the table (besides the 4 cells) and verify that the grand total equals 1.

2. Answer the following questions using your work above. There should be no more
calculation needed. BE SURE TO LABEL EVERYTHING WITH THE CORRECT NOTATION!

a. What percentage of companies who are laying off are cutting back?

b. What percentage of all companies are laying off?

c. What percentage of all companies are laying off and cutting back?

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Suppose 5% of the U.S. population has a certain disease. Of those who have the disease, 45%
are male. Of those who do not have the disease, 35% are female. Let M = Male, F= Female, D =
Disease, and ND = No Disease.

3. Which of the following choices represent the probabilities given in the problem above?
a. P(D) = .05, P(M)=0.45, P(F)=0.35
b. P(D)=0.05, P(D|M)=0.45, P(D|F)=0.35
c. P(D)=0.05, P(M|D)=0.45, P(F|D)=0.35
STAT 1430 Recitation 7A Conditional Probability

d. P(D)=0.05, P(M|D)=0.45, P(F|ND)=0.35

4. Use all the given information, write down the appropriate probability notation in each of the 9
boxes in the table below (the 4 cells plus all the marginals and grand total). NOTATION ONLY – NO
FORMULAS OR CALCULATIONS PLEASE!
M F Total
D
ND
Total

5.
a. Use all the given information, show your work to calculate all probabilities for the table
below, including the 4 cells and the marginal totals. SHOW ALL WORK USING NOTATION.
INCLUDE IN YOUR NOTATION THE ITEM YOU ARE TRYING TO FIND, SUCH AS P(D and M)
=…
M F Total
D
ND
Total

b. We knew in the beginning that “of those who have the disease, 45% are male.” Now we want
to know “of those that are male, what % have the disease?” Answer this question using
the table above.

6. Verify your answer to this question by doing calculations using probability notation and Bayes
Rule. Show all work. (Note, the work has been done already to form the table; it’s just easier to
look at the final product by creating a table first and then using it. However understanding
WHERE things come from in terms of formulas is critical for the exam.)

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7. Suppose Gender and Opinion (Y/N) on an issue are independent. You are given the following
information in the two way table below. Use it to fill in the 4 cells of the table. If you cannot
calculate it with the given information, or the answer is not possible, explain why.
Y N Total
M .1
F .9
Total .3 .7 1
STAT 1430 Recitation 7A Conditional Probability

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Suppose you run a bank and you have the following information: 40% of your customers are
female, and 60% are male. Suppose 80% of the female customers use credit cards, and 60% of the
male customers use credit cards.
Solve each of the following using probability notation and formulas; show all work.

8. Find the probability that a female customer does not use a credit card.

9. Find the probability that a male customer does not use a credit card.

10. Find the overall probability that a customer uses a credit card.

11. Find the probability that a customer who uses a credit card is a female.

12. Find the probability that a customer who uses a credit card is a male.

13. Find the probability that a customer is male and uses a credit card

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TRUE OR FALSE?

14. P(A|B) + P(A|NOT B) = 1 TRUE or FALSE?______________

15. P(A|B) + P(NOT A|B) = 1 TRUE or FALSE?______________