Understanding Business Statistics

CHAPTER 4

Probability

LEARNING OBJECTIVES

After completing the chapter, you should be able to

1. Define probability and describe three ways of assigning probabilities to events.
2. Explain and apply the core rules of probability.
3. Use Venn diagrams to visualize and explain essential probability concepts.
4. Describe a general problem solving strategy and use Venn diagrams, probability trees and joint probability tables to implement that strategy.
5. Use the three basic counting rules to count outcomes in a probability experiment.

EVERYDAY STATISTICS

Hang up and Drive

Assured that their responses would be confidential, 600 drivers in Washington State recently confessed to their biggest behind-the-wheel failings. Their greatest sin? Eating while driving. Sixty-five percent of the drivers surveyed reported that they had eaten a meal while driving their car. Coming in a close second was cell phone use: 58% percent of drivers acknowledged talking on a cell phone while driving. In addition, 25% admitted steering with their legs, 14% admitted shaving or applying makeup, 6% said they read a newspaper or book, and 3% admitted to writing text messages.

How do these distractions affect the risk of being injured or killed in a car accident? If there is any good news in today's traffic fatality statistics, it's that the probability of dying in a car crash in the US is still relatively low. In 2012, ...