A restaurant serves three fixed-price dinners costing $12, $15, and $20. For a randomly selected couple dining at this restaurant, let X = the cost of the man’s dinner and Y = the cost of the woman’s dinner. The joint pmf of X and Y is given in the following table:
p(x, y) | 12 | y 15 | 20 | |
12 | .05 | .05 | .10 | |
X | 15 | .05 | .10 | .35 |
20 | 0 | .20 | .10 |
a. Compute the marginal pmf’s of X and Y.
b. What is the
c. Are X and Y independent? Justify your answer.
d. What is the expected total cost of the dinner for the two people?
e. Suppose that when a couple opens fortune cookies at the conclusion of the meal, they find the message “You will receive as a refund the difference between the cost of the more expensive and the less expensive meal that you have chosen.” How much would the restaurant expect to refund?
a.
Find the marginal pmf’s of X and Y.
Answer to Problem 75SE
The marginal pmf of X is:
X | 12 | 15 | 20 |
0.20 | 0.50 | 0.30 |
The marginal pmf and Y is:
Y | 12 | 15 | 20 |
0.10 | 0.35 | 0.55 |
Explanation of Solution
Given info:
In a restaurant serving three fixed-price dinners, X is the cost of a man’s dinner and Y is the cost of a woman’s dinner, for a randomly selected couple. The joint pmf of X and Y are given. The possible values of both X and Y are 12, 15 and 20.
Calculation:
Marginal pmf:
The marginal probability mass function or marginal pmf for each possible value x of a random variable X, when the joint pmf of X and Y is
The marginal pmf of X for
This is the same as the row total for the row containing
Thus, the marginal probability for each value of X is the row total for the corresponding value of X.
The marginal pmf of Y for
This is the same as the column total for the column containing
Thus, the marginal probability for each value of Y is the column total for the corresponding value of Y.
Thus, the marginal pmf for X and Y are found similarly as follows:
y | |||||
12 | 15 | 20 | Total | ||
x | 12 | 0.05 | 0.05 | 0.10 | 0.20 |
15 | 0.05 | 0.10 | 0.35 | 0.50 | |
20 | 0 | 0.20 | 0.10 | 0.30 | |
Total | 0.10 | 0.35 | 0.55 | 1 |
Thus, the marginal pmf of X and Y are:
X | 12 | 15 | 20 |
0.20 | 0.50 | 0.30 | |
Y | 12 | 15 | 20 |
0.10 | 0.35 | 0.55 |
b.
Find the probability that each of the man’s and the woman’s dinner cost at most $15.
Answer to Problem 75SE
The probability that each of the man’s and the woman’s dinner cost at most $15 is 0.25.
Explanation of Solution
Calculation:
The probability that each of the man’s and the woman’s dinner cost at most $15 is
Now,
From the data,
Thus,
Hence, the value of
c.
Decide whether X and Y are independent.
Answer to Problem 75SE
The random variables X and Y are not independent.
Explanation of Solution
Calculation:
Independent random variables:
The pair of random variables, X and Y are independent, if, for every pair of values, x and y, taken by the random variables is such that
Consider the pair of values
From the marginal pmf table,
Thus,
But from the data,
Thus,
Hence, the random variables X and Y are not independent.
d.
Find the expected total cost of the dinner for the two people.
Answer to Problem 75SE
The expected total cost of the dinner for the two people is $33.35.
Explanation of Solution
Calculation:
The total cost of the dinner for the two people is
Expectation of sum of random variables:
The expectation of sum of 2 random variables X and Y, having joint pmf
The calculation for
The following table shows the necessary calculations:
24 | 0.05 | 1.2 | |
27 | 0.05 | 1.35 | |
32 | 0.1 | 3.2 | |
27 | 0.05 | 1.35 | |
30 | 0.1 | 3 | |
35 | 0.35 | 12.25 | |
32 | 0 | 0 | |
35 | 0.2 | 7 | |
40 | 0.1 | 4 | |
Hence, the expected total cost of the dinner for the two people is $33.35.
e.
Find the amount of money the restaurant would expect to refund, if in the fortune cookies at the end of the meal, a couple finds the message “You will receive as a refund the difference between the cost of the more expensive and the less expensive meal that you have chosen.”
Answer to Problem 75SE
The amount of money the restaurant would expect to refund under the given scenario is $3.85.
Explanation of Solution
Justification:
The difference between the cost of the more expensive and the less expensive meal is
Expectation of a function of random variables:
The expectation of a function,
Thus, the expectation of
The calculation for
The following table shows the necessary calculations:
0 | 0.05 | 0 | |
3 | 0.05 | 0.15 | |
8 | 0.1 | 0.8 | |
3 | 0.05 | 0.15 | |
0 | 0.1 | 0 | |
5 | 0.35 | 1.75 | |
8 | 0 | 0 | |
5 | 0.2 | 1 | |
0 | 0.1 | 0 | |
Hence, the expected total cost of the dinner for the two people is $3.85.
Want to see more full solutions like this?
Chapter 5 Solutions
EBK PROBABILITY AND STATISTICS FOR ENGI
- solve the question based on hw 1, 1.41arrow_forwardT1.4: Let ẞ(G) be the minimum size of a vertex cover, a(G) be the maximum size of an independent set and m(G) = |E(G)|. (i) Prove that if G is triangle free (no induced K3) then m(G) ≤ a(G)B(G). Hints - The neighborhood of a vertex in a triangle free graph must be independent; all edges have at least one end in a vertex cover. (ii) Show that all graphs of order n ≥ 3 and size m> [n2/4] contain a triangle. Hints - you may need to use either elementary calculus or the arithmetic-geometric mean inequality.arrow_forwardWe consider the one-period model studied in class as an example. Namely, we assumethat the current stock price is S0 = 10. At time T, the stock has either moved up toSt = 12 (with probability p = 0.6) or down towards St = 8 (with probability 1−p = 0.4).We consider a call option on this stock with maturity T and strike price K = 10. Theinterest rate on the money market is zero.As in class, we assume that you, as a customer, are willing to buy the call option on100 shares of stock for $120. The investor, who sold you the option, can adopt one of thefollowing strategies: Strategy 1: (seen in class) Buy 50 shares of stock and borrow $380. Strategy 2: Buy 55 shares of stock and borrow $430. Strategy 3: Buy 60 shares of stock and borrow $480. Strategy 4: Buy 40 shares of stock and borrow $280.(a) For each of strategies 2-4, describe the value of the investor’s portfolio at time 0,and at time T for each possible movement of the stock.(b) For each of strategies 2-4, does the investor have…arrow_forward
- Negate the following compound statement using De Morgans's laws.arrow_forwardNegate the following compound statement using De Morgans's laws.arrow_forwardQuestion 6: Negate the following compound statements, using De Morgan's laws. A) If Alberta was under water entirely then there should be no fossil of mammals.arrow_forward
- Negate the following compound statement using De Morgans's laws.arrow_forwardCharacterize (with proof) all connected graphs that contain no even cycles in terms oftheir blocks.arrow_forwardLet G be a connected graph that does not have P4 or C3 as an induced subgraph (i.e.,G is P4, C3 free). Prove that G is a complete bipartite grapharrow_forward
- Prove sufficiency of the condition for a graph to be bipartite that is, prove that if G hasno odd cycles then G is bipartite as follows:Assume that the statement is false and that G is an edge minimal counterexample. That is, Gsatisfies the conditions and is not bipartite but G − e is bipartite for any edge e. (Note thatthis is essentially induction, just using different terminology.) What does minimality say aboutconnectivity of G? Can G − e be disconnected? Explain why if there is an edge between twovertices in the same part of a bipartition of G − e then there is an odd cyclearrow_forwardLet G be a connected graph that does not have P4 or C4 as an induced subgraph (i.e.,G is P4, C4 free). Prove that G has a vertex adjacent to all othersarrow_forwardWe consider a one-period market with the following properties: the current stock priceis S0 = 4. At time T = 1 year, the stock has either moved up to S1 = 8 (with probability0.7) or down towards S1 = 2 (with probability 0.3). We consider a call option on thisstock with maturity T = 1 and strike price K = 5. The interest rate on the money marketis 25% yearly.(a) Find the replicating portfolio (φ, ψ) corresponding to this call option.(b) Find the risk-neutral (no-arbitrage) price of this call option.(c) We now consider a put option with maturity T = 1 and strike price K = 3 onthe same market. Find the risk-neutral price of this put option. Reminder: A putoption gives you the right to sell the stock for the strike price K.1(d) An investor with initial capital X0 = 0 wants to invest on this market. He buysα shares of the stock (or sells them if α is negative) and buys β call options (orsells them is β is negative). He invests the cash balance on the money market (orborrows if the amount is…arrow_forward
- Holt Mcdougal Larson Pre-algebra: Student Edition...AlgebraISBN:9780547587776Author:HOLT MCDOUGALPublisher:HOLT MCDOUGALGlencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw HillBig Ideas Math A Bridge To Success Algebra 1: Stu...AlgebraISBN:9781680331141Author:HOUGHTON MIFFLIN HARCOURTPublisher:Houghton Mifflin Harcourt
- Intermediate AlgebraAlgebraISBN:9781285195728Author:Jerome E. Kaufmann, Karen L. SchwittersPublisher:Cengage LearningAlgebra for College StudentsAlgebraISBN:9781285195780Author:Jerome E. Kaufmann, Karen L. SchwittersPublisher:Cengage LearningFunctions and Change: A Modeling Approach to Coll...AlgebraISBN:9781337111348Author:Bruce Crauder, Benny Evans, Alan NoellPublisher:Cengage Learning