Question

According to a survey of American households, the probability that the residents own 2 cars if annual household income is over $50,000 is 80%. Of the households surveyed, 60% had incomes over $50,000 and 70% had 2 cars. The probability that the residents of a household do not own 2 cars and have an income over $50,000 a year is

(A) 0.12.
(B) 0.18.
(C) 0.22.
(D) 0.48.

Answer 1

(A) 0.12.

Explanation:

60% of the households surveyed had an income of over $50,000.

Of those, 80% own two cars. So, 20% do not own two cars.

So

The probability that the residents of a household do not own 2 cars and have an income over $50,000 a year is. This part of the population are the 20% that do not have two cars of those 60% that have an income of over $50,000.

`P = 0.6*0.2 = 0.12`

The correct answer is:

(A) 0.12.