ECN 221 Exam 1 Study Guide – Arizona State University – Data Types, Summary Statistics, and Probability Principles

ECN 221 Exam 1 Study Guide – Arizona State
University – Data Types, Summary Statistics,
and Probability Principles

relative frequency (empirical) probability based on experimentation or historical data



ex: consumer preference for soft drinks

dr. pepper = .067



interpret as probability of a consumer preferring dr. pepper



subjective probability based on JUDGEMENT



ex: company working on deal

vp #1 believes there's a .7 chance of it going through

vp#2 believes there's a .4 chance



event collection of sample points



probability of events = sum of probability of all sample points



complement of event all sample points NOT IN event A



P(A) + P(A)^c = 1

, addition laws probability of event A, B or A and B occuring



P(AuB) = P(A) + P(B) - P(AnB)



Union event containing ALL sample points in A and B



both circles AND middle of venn diagram



intersection all sample points in both A AND B



only middle of venn diagram

nominal data names indicating characteristic

ex: NYSE, NASDAQ



ordinal data can be ordered/ranked

ex: gold, silver, bronze



interval data quantitative AND can be ranked BUT is a fixed unit of measurement

ex: SAT scores, credit score



ratio data quantitative AND can be ranked BUT is a fixed unit of measurement AND the
ratio is meaningful



categorical data (qualitative) identify characteristics of element

ex: gender, marital status

ALSO: zip code, phone number