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Economic Statistics - Midterm 2 Cheat Sheet (DRAFT) by

Probability, Random Variables, Sampling (exam essentials)

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Probab­ility basics (defin­itions & rules)

Defini­tions
Random phenomenon — outcome uncertain but with a regular distri­bution over many repeti­tions.
Probab­ility model — (1) sample space S (all possible outcomes) and (2) probab­ilities for each outcome.
Event — set of outcomes of interest (e.g., “< 3 on a die”).
Disjoint (mutually exclusive) — A and B cannot happen together.
Indepe­ndent — occurrence of A does not affect probab­ility of B (coin tosses, etc.).

Probab­ility basics (defin­itions & rules)

Rules
1. Bounds - 0 ≤ P(A) ≤ 1 | Probab­ilities can’t be negative or >1 | If you ever get >1, check math!
2. Certainty - P(S)=1 | Something must happen | “Whole sample space = 1”
3. Complement - P(A^c)­=1−P(A) | If P(rain­)=0.2, P(no rain)=0.8 | Useful for “at least one” problems
4.