Q# What do you mean by
objective and subjective probabilities? Fit one simple real-life example in
each case, which really reflect its linkage to objective and subjective
probabilities.
Objective
probabilities
Objective
probabilities are based on mathematical analysis, experiments, and mathematical
equations than anecdotes, personal experience, or hunting. In the financial
world, taking advantage of opportunities can be very important to prevent from
making emotional decisions when investing.
We often deceive ourselves into thinking
that "we have always been lucky in car investments" or that "we
have not lost money on gold".
Subjective
Probabilities
The probabilities
where we use our ideas, emotions and thoughts on the basis of past experience
to find opportunities and probabilities. Example: we think,we have an 80%
chance that our best friend will call today, because her car broke down
yesterday and he will need a ride.
Example
let's say Ali buys a raffle ticket to
support the local Girl Scouts home team. The team sells 1,000 tickets. From a
standpoint, Ali has 1 in 1,000 chance of winning. But humbly, John thinks his
chances of winning are very high because he "feels good about it."
However, his chances are still 1 in 1,000.
b. In a survey of 200
college students, it was found that;
120 study mathematics, 90 study physics
70 study chemistry, 40 study mathematics
and physics,
30 study physics and
chemistry, 50 study chemistry and
mathematics
20 study none of these
subjects.
Depict the events
“A: Mathematics”, “B: Physics” and “C: Chemistry” on the given Venn-Diagram,
and find the number of the students who studies all the three subjects.
Solution#1
Let Assume
A =
Mathematics ; B = Physics and C = Chemistry
n(A) = 120 , n(B)
= 90 ,
n(C) = 70
n
( A ∩ B) = 40 ,
n ( B ∩ C ) = 30
n
( C ∩ A ) = 50 , n ( A∪B∪
C )’ = 20
Now
n(A∪B∪
C)’ = n(U) – n(A∪B∪ C)
20
= 200 – n (A∪B∪ C)
Therefore,
n(A∪B∪ C) = 200 – 20 = 180
n(A∪B∪
C)
=
n(A) + n(B) + n(C) – n(A ∩ B) – n(B ∩ C) – n(C ∩ A) + n(A ∩ B ∩ C)
180
= 120 + 90 + 70 - 40 - 30 - 50 + n(A ∩ B ∩ C)
⇒ n(A ∩ B ∩ C) =180 - 120 - 90 - 70 + 40 + 30 +
50
⇒ n(A ∩ B ∩ C)
= 20. (Students who studies all three subjects)