Applied Statistics in Business

1. Define (a) random experiment, (b) sample space, (c) simple event, and (d) compound event.
2. What are the three approaches to determining probability? Explain the differences among them.
3. Sketch a Venn diagram to illustrate (a) complement of an event, (b) union of two events, (c) intersection of two events, (d) mutually exclusive events, and (e) dichotomous events.
4. Define odds. What does it mean to say that odds are usually quoted against an event?
5. (a) State the additive law. (b) Why do we subtract the intersection?
6. (a) Write the formula for conditional probability. (b) When are two events independent?
7. (a) What is a contingency table? (b) How do we convert a contingency table into a table of relative frequencies?
8. In a contingency table, explain the concepts of (a) marginal probability and (b) joint probability.
9. Why are tree diagrams useful? Why are they not always practical?
10. What is the main point of Bayes's Theorem?
11. Define (a) fundamental rule of counting, (b) factorial, (c) permutation, and (d) combination.

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Review Questions from Applied Statistics in Business and Economics, by Doane and Seward chapter 5: Very systematic, complete, high-quality answers to all the 11 questions, with pictures and illustrations where required.