Exam 14: Understanding Probability and Long-Term Expectations

For Questions use the following narrative Narrative: Taxes Suppose you have a taxing policy where 60% of the population pays $10,000 per year in taxes per person, and the other 40% pays $100 per year in taxes per person. -{Taxes narrative} What is the expected value for the amount of yearly taxes paid by one person in this population?

The expected value __________ have to be one of the possible outcomes.(Choices: "does" or "does not.")

If two events are mutually exclusive, they __________ be independent.

Which of the following outcomes are not mutually exclusive?

For Questions , use the following narrative: Narrative: Instant lotto Suppose an "Instant Lotto" ticket costs $5, and the chances of winning the $500 prize are 1/10,000.There are no other prizes. -{Instant lotto narrative} Interpret what the expected value would mean in this situation, in words that a non-statistics student would understand.(It is not necessary to calculate the expected value here.)

For Questions use the following narrative: Narrative: Grades Suppose a class of 100 students took their statistics final and their grades are shown in the table below. -{Grades narrative} What is the probability that a student selected at random passed the final (where a D is considered to be a passing grade)?

Tell whether the following statement is correct; if it is not correct, explain the problem."60% of the voters were in favor of Issue 1.That means 40% of them must have opposed it."

Name two restrictions on personal probabilities, from a statistical standpoint.

Suppose your commute to work involves encountering 3 inter

Which of the following is an example of a cumulative probability?

Suppose you encounter one traffic light on your commute to work each day.You have determined that the probability that this light will be red is 1/3.Which of the following is not a correct interpretation of this probability?

Suppose you know that for each ticket the probability of winning a certain "instant win" lottery game is 1/100.You have purchased 99 tickets so far, with no luck.What is your chance that the next ticket you buy is a winner?

Suppose Consumer Reports tests a random sample of 1,000 flashlights of a certain brand and finds 20 of them to be defective.They report the chances of buying a defective flashlight (for this brand) to be .02.This is an example of using the _______________ approach to determining a probability.

Suppose a slot machine has an expected payout of .95 cents on the dollar, meaning for every dollar you play, you get 95 cents back.What is your expected value for the amount lost per dollar played on this machine?

Suppose 40% of the people in a population smoke 20 cigarettes per day, and the remaining 60% smoked none.Which of the following involves a correct interpretation of the expected value?

Which of the following does not apply to the relative-frequency approach for trying to determine a probability of a specific outcome?

Which of the following is not an example of a statement based on a personal probability?

Which of the following is not an example of using the relative-frequency interpretation of probability?

For Questions use the following narrative: Narrative: Grades Suppose a class of 100 students took their statistics final and their grades are shown in the table below. -{Grades narrative} Choose one student at random.What is the probability that he/she received a B or a C?

Suppose 5% of the people who buy a certain type of DVD player return it to get their money back.The DVD player costs $100.What is the expected loss, per customer, for the company due to returns (ignoring the monetary value of the returned DVD player)?