Question

1. classify each statement as an example of classical probability, empirical probability, or subjective probability.

a. the probability that a student will get a c or better in a statistics course is about 70%.
b. the probability that a new fast - food restaurant will be a success in chicago is 35%.
c. the probability that interest rates will rise in the next 6 months is 0.50.
d. the probability that the unemployment rate will fall next month is 0.03.

Explanation:

• a. Empirical probability is based on past data or experiments. If there is data from previous statistics courses (e.g., number of students who got C or better divided by total number of students), this is empirical.
• b. Subjective probability is based on personal judgment. The success of a new fast - food restaurant in Chicago is often a matter of an individual's (or a group's) educated guess, considering factors like competition, location, etc., but not based on a well - defined set of equally likely outcomes (classical) or a large - scale experiment (empirical).
• c. Interest rate movement is complex and not based on equally likely outcomes (classical) or a large - scale repeated experiment (empirical). It is more of an expert's or analyst's personal assessment, so it is subjective.
• d. Unemployment rate movement is a complex economic phenomenon. The probability given is not based on equally likely outcomes (classical) or a large - scale experiment (empirical). It is likely an economist's or analyst's personal view, so it is subjective.

Answer:

a. Empirical probability
b. Subjective probability
c. Subjective probability
d. Subjective probability