Here is the following question: \"Consider an economy in which the overall unemp
ID: 1093045 • Letter: H
Question
Here is the following question:
"Consider an economy in which the overall unemployment rate is 18%. Moreover, 20% of individuals are college graduates, and 2% of all individuals are unemployed college graduates.
a) If I pick a college graduate at random, what is the probability that he or she is unemployed?"
I made Unemployement = B and College Grads = A
Using the definition of conditional probability, I though that P(B | A) = [P(B union A)] / P(A) which is. . .
[(.2+.18) - .02] / .2 = 1.8 which would be 180%. That does not sound correct.
Explanation / Answer
No,your solution is not correct.I have written correct solution
Unemployement = B
College Grads = A
P(B) = 0.18
P(A) = 0.2
P(unemployed college graduates) = P(AIB) = 0.02
but P(AIB) = P(A U B)/P(B)
Therefore, P(A U B) = P(AIB) X P(B) = 0.02 X 0.18 = 0.0036
pick a college graduate at random, probability that he or she is unemployed = P(BIA) = P(A U B)/P(A) = 0.0036/0.2 = 0.018 = 1.8%