i

Problem Set - II: Conditional Probability, Independence and Bayes’

theorem
Ex. 1 — From the following two-way table answer the questions given be-
low:
D E F
a 0.12 0.13 0.08
b 0.18 0.09 0.04
c 0.06 0.24 0.06

1.P (b ∩ E) =?

2.P (b ∪ F ) =?

3.P (c ∪ D0 ) =?

4.P (a|F ) =?

Ex. 2 — A picnic is arranged to be held on a particular day. The weather

forecast suggests that there is a 70% chance of rain on that day. If it rains,
probability of good picnic is 0.2 while if it does not, probability is 0.9.

1.What is the probability that the picnic would be good?

2.If the picnic was good, what is the probability that it did not rain that
day?

Ex. 3 — Physicians and pharmacists sometimes fail to inform patients ad-

equately about the proper application of prescription drugs and about the
precautions to take in order to avoid potential side effects. This failure is an
ongoing problem in the United States. One method of increasing patients’
awareness of the problem is for physicians to provide Patient Medication In-
struction (PMI) sheets. The American Medical Association, however, has
found that only 20% of the doctors who prescribe drugs frequently distribute
PMI sheets to their patients. Assume that 20% of all patients receive the
PMI sheet with their prescriptions and that 12% receive the PMI sheet and
are hospitalized because of a drug related problem. What is the probability
that a person will be hospitalized for a drug-related problem given that the
person has received the PMI sheet?

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Ex. 4 — A soft-drink bottler has two quality control inspectors indepen-

dently check each case of soft drinks for chipped or cracked bottles before the
cases leave the bottling plant. Having observed the work of the two trusted
inspectors over several years, the bottler has determined that the probability
of a defective case getting by the first inspector is .05 and the probability of a
defective case getting by the second inspector is .10. What is the probability
that a defective case gets by both inspectors?

Ex. 5 — My probability of getting job A is 0.20; my probability of getting

job B is 0.15 and my probability of getting job C is 0.35. All jobs are inde-
pendent of each other. What is my probability of getting at least one of these
jobs?

Ex. 6 — A company has two production lines for plastic bottles, A and B.
Two percent of the bottles coming off of line A are defective and 8% of those
off of line B are defective. Line A produces three times as many bottles as
Line B. If a bottle is selected at random and found to be defective, what is
the probability that it came from line A?

Ex. 7 — Suppose research has indicated that only 1% of credit card trans-
actions are fraudulent. Further suppose that 0.03% of fraudulent credit card
transactions are associated with internet casinos, but that only 0.0007% of
non-fraudulent credit card transactions are associated with internet casinos.
If a given credit card transaction involves an internet casino, what is the
probability it is fraudulent?

Ex. 8 — Definition of Total Quality Management (TQM) is ”management

philosophy and a system of management techniques to improve product and
service quality and worker productivity.” TQM involves such techniques as
teamwork, empowerment of workers, improved communication with customers,
evaluation of work processes, and statistical analysis of processes and their
output (Benson, Mitznesota in Management Review, Fall 1992). One hun-
dred U.S. companies were surveyed and it was found that 30 had implemented
TQM. Among the 100 companies surveyed, 60 reported an increase in sales

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last year. Of those 60,20 had implemented TQM. Suppose one of the 100
surveyed companies is to be selected at random for additional analysis.

1.What is the probability that a firm that implemented TQM is selected?

That a firm whose sales increased is selected? Are the two events (TQM
implemented) and (Sales increased) independent or dependent? Explain.

2.Suppose that instead of 20 TQM implementers among the 60 firms report-

ing sales increases, there were 18. Now are the events TQM implemented
and Sales increased independent or dependent? Explain.

3.If a company has reported increase in sales, what is the probability that
it implemented TQM?

Ex. 9 — Two stocks A and B are known to be related in that both are in
the same industry. The probability that stock A will go up in price tomorrow
is 0.20, and the probability that both stocks A and B will go up tomorrow is
0.12. Suppose that tomorrow you find that stock A did go up in price. What
is the probability that stock B went up as well?

Ex. 10 — The probability that a bank customer will default on a loan is

0.04 if the economy is high and 0.13 if the economy is not high. Suppose the
probability that the economy will be high is 0.65. What is the probability
that the person will default on the loan?

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Ex. 1 — The following probability matrix cntains a breakdown of the US

age and gender of physicians:
< 35 35-44 45-54 55-64 > 65
Male 0.11 0.20 0.19 0.12 0.16
Female 0.07 0.08 0.04 0.02 0.01
1.What is the probability that a randomly selected physician is older than
65 years of age given its him?

2.What is the probability that a randomly selected physician is either an

woman or in the age group 45-54?

3.What is the probability that a randomly selected physician is either a man

or aged below 55?

Ex. 2 — The probability that production will increase if interest rates de-
cline more than 0.5 percentage point for a given period is 0.72 and the prob-
ability that production will increase if interest rates don’t decline more than
0.5 percentage point for that period is 0.68. The probability that interest
rates will decline by more than 0.5 percentage point in the period in question
is 0.25. What is the probability that, for the period in question, either the
interest rate will decline or production will increase?

Ex. 3 — The probability that a consumer entering a retail outlet for micro-
computers and software packages will buy a computer of a certain type is 0.15.
The probability that the consumer will buy a particular software package is
0.10. There is a 0.05 probability that the consumer will buy both the com-
puter and the software package. What is the probability that the consumer
will buy the computer or the software package?

Ex. 4 — According to BusinessWeek, 50% of top managers leave their jobs

within 5 years. If 25 top managers are followed over 5 years after they assume
their positions, what is the probability that none will have left their jobs?
All of them will have left their jobs? At least one will have left the position?
What implicit assumption are you making and how do you justify it?

Ex. 5 — The probability that a graduating senior will pass the certified
public accountant (CPA) examination is 0.60. The probability that the grad-

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uating senior will both pass the CPA examination and get a job offer is 0.40.
Suppose that the student just found out that she passed the CPA examination.
What is the probability that she will be offered a job?

Ex. 6 — Two fair dice are rolled. What is the conditional probability that
at least one lands on 6 given that the dice land on different numbers? What
is the probability that at least one of a pair of fair dice lands on 6, given that
the sum of the dice is i, i = 2, 3, . . . , 12 (compute for each i)?

Ex. 7 — Consider an urn containing 12 balls, of which 8 are white and

4 are black. A sample of size 4 is to be drawn with replacement (without
replacement). What is the conditional probability (in each case) that the first
and third balls drawn will be white given that the sample drawn contains
exactly 3 white balls?

Ex. 8 — The king comes from a family of 2 children. What is the probabil-
ity that the other child is his sister? Does your probability calculation change
if it is known that the king is the elder of the two?

Ex. 9 — Two cards are randomly chosen without replacement from an or-
dinary deck of 52 cards. Let B be the event that both cards are aces, let As
be the event that the ace of spades is chosen, and let A be the event that at
least one ace is chosen. Find (a) P(B—As) (b) P(B—A).
Independence:

Ex. 10 — A large foreign automaker is interested in identifying its target

market in the United States. The automaker conducts a survey of potential
buyers of its high performance sports car and finds that 35% of the potential
buyers consider engineering quality among the car’s most desirable features
and that 50% of the people surveyed consider sporty design to be among the
car’s most desirable features. Out of the people surveyed, 25% consider both
engineering quality and sporty design to be among the car’s most desirable
features. Based on this information, do you believe that potential buyers’
perceptions of the two features are independent? Explain

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Ex. 11 — A financial service company advertises its services in magazines,

runs billboard ads on major highways, and advertises its services on the radio.
The company estimates that there is a 0.10 probability that a given individual
will see the billboard ad during the week, a 0.15 chance that he or she will
see the ad in a magazine, and a 0.20 chance that she or he will hear the
advertisement on the radio during the week. What is the probability that a
randomly chosen member of the population in the area will be exposed to at
least one method of advertising during a given week? (Assume independence.)

Ex. 12 — A fashion designer has been working with the colors green, black,
and red in preparing for the coming season’s fashions. The designer estimates
that there is a 0.3 chance that the color green will be ”in” during the coming
reason , a 0.2 chance that black will be among the season’s colors, and a 0.15
chance that red will be popular. Assuming that colors are chosen indepen-
dently of each other for inclusion in new fashions, what is the probability that
the designer will be successful with at least one of her colors?
Baye’s Theorem:

Ex. 13 — It has been found from past experience that of the articles pro-
duced by a factory, 20% come from machine 1, 30% from machine 2 and 50%
from machine 3. The percentages of satisfactory articles among those pro-
duced are 95% for machine 1, 85% for machine 2 and 90% for machine 3.
(a) An article is chosen at random from a lot. What is the probability that it
is satisfactory?
(b) Assuming that the article is satisfactory, what is the probability that it
was produced by machine 1?

Ex. 14 — Researchers at Kurume University in Japan surveyed 225 workers

aged 41 to 60 years and found that 30% of them were skilled workers and 70%
were unskilled. At the time of survey, 15% of skilled workers and 30% of
unskilled workers were on an assembly line. A worker is selected at random
from the age group 41 to 60.

1.What is the probability that the worker is on an assembly line?

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2.Given that the worker is on an assembly line, what is the probability that
the worker is unskilled?

Ex. 15 — The probability that a new product will be successful if a com-

petitor does not come up with a similar product is 0.67. The probability
that the new product will be successful in the presence of a competitor’s new
product is 0.42. The probability that the competing firm will come out with
a new product during the period in question is 0.35. If the product is not a
success, what is the probability that the competitor launched a new product?

Ex. 16 — A total of 46 percent of the voters in a certain city classify them-

selves as Independents, whereas 30 percent classify themselves as Liberals and
24 percent say that they are Conservatives. In a recent local election, 35 per-
cent of the Independents, 62 percent of the Liberals, and 58 percent of the
Conservatives voted. A voter is chosen at random. Given that this person
voted in the local election, what is the probability that he or she is either an
Independent or a Liberal?

Ex. 17 — In a typing pool, three typists share their workload in the ratio
of 30%, 35% and 35% of the total work. The 1st , 2nd and 3rd typist spoil the
work to the extent of 3%, 4% and 5% respectively. A work is selected and
found spoiled. Which typist is most likely to spoil it?

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Harder Problems:Conditional probability, Independence and Bayes’

Theorem
Ex. 1 — If the events A and B are independent, then show that the pairs
(A, B 0 ), (A0 , B) and (A0 , B 0 ) are also independent.

Ex. 2 — If the events A, B, C are mutually independent, then the pairs

(A, B ∩ C), (B, A ∩ C), (C, A ∩ B) are also independent.

Ex. 3 — Suppose that we have 3 cards that are identical in form, except
that both sides of the first card are colored red, both sides of the second card
are colored black, and one side of the third card is colored red and the other
side black. The 3 cards are mixed up in a hat, and 1 card is randomly selected
and put down on the ground. If the upper side of the chosen card is colored
red, what is the probability that the other side is colored black?

Ex. 4 — A plane is missing, and it is presumed that it was equally likely

to have gone down in any of 3 possible regions. Let 1?βi , i = 1, 2, 3, denote
the probability that the plane will be found upon a search of the ith region
when the plane is, in fact, in that region. (The constants βi are called over-
look probabilities, because they represent the probability of overlooking the
plane; they are generally attributable to the geographical and environmental
conditions of the regions.) What is the conditional probability that the plane
is in the ith region given that a search of region 1 is unsuccessful (find the
probabilities for all i)?

Ex. 5 — For n independent events A1 , A2 . . . An , P (Ai ) = p, ∀i = 1, 2 . . . n.

What is the probability that

1.at least one the events will occur?

2.at least 5 of the events will occur?

Ex. 6 — Suppose that E and F are mutually exclusive events of an experi-

ment. Show that if independent trials of this experiment are performed, then
P (E)
E will occur before F with probability [P (E)+P (F )] .

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Ex. 7 — Show that if P (A) > 0, then

P (A ∩ B|A) ≥ P (A ∩ B|A ∪ B)

.
Ex. 8 — Suppose for the events A, B, C, we have P (A) = a, P (A∪B ∪C) =
1−b, P (A∩B ∩C) = 1−c and P (A0 ∩B 0 ∩C 0 ) = x. Prove that the probability
x satisfies the equation

ax2 + [ab − (1 − a)(a − c − 1)]x + b(1 − a)(1 − c) = 0].

(1−c)(x+b) x
Moreover show that P (B) = ax and P (C) = x+b .

D R A F T July 22, 2019, 10:57am D R A F T