Probability that two people Mike and Joe sit next to each in a random circular seating arrangement of eight seats. Is the sample space 8 choose 2? Why? What would the answer to this be?

Wherever Mike is seated, there are $7$ unoccupied seats, and Joe is equally likely to be at any of them. Of these $7$ seats, $2$ are next to Mike, so the probability Joe is next to Mike is $2/7$.
Remark: There can be more than one sample space that is useful for calculating a probability. If we are going to solve the problem by counting, the most important thing is to make sure that we use a sample space of equaly likely outcomes.
One possible sample space is the set of pairs of seats. That sample space has $\binom{8}{2}$ elements. Or else it may be useful to think of Mike as sitting down first, and then Joe. The set of ordered pairs of seat choices is then a good sample space. That sample space has $(8)(7)$ elements. Or else we can exploit the symmetry, and use as our sample space the set of choices Joe can make, after Mike is seated. That gives a nice small sample space with $7$ equally likely elements.
