Applied Economics & Statistics 3: Random Variables and Probability Distributions Flashcards
In this topic we will cover: 1 Brief probability review. 2 Random variables. 3 Continuous probability distributions. The uniform distribution. The normal and standard normal distributions. The exponential distribution. 4 Z-scores
1
Q
Define ‘probability’
A
A value p ∈ [0, 1] describing the relative possibility (chance or likelihood)
an event will occur
2
Q
What’s a ‘random variable’?
A
A quantity resulting from an experiment that, by chance, can assume different values (where an experiment is any process that generates data)
E.g.,GDP, temperature, your final marks for the Applied Economics
and Statistics module, etc.
3
Q
What’s the name for ‘a quantity resulting from an experiment that, by chance, can assume
different values’?
’
A
Random Variable
4
Q
Describe the representation of random variables
A
- The values taken by the variables will occur with certain probabilities
and these can be represented with probability distributions. - We represent the variables with letters, like x and their density or
probability distribution functions by f (x ).
5
Q
A
