Use the following to answer question:
-(Table: Income and Utility for Tyler)Use Table: Income and Utility for Tyler.The table shows the utility Tyler receives at various income levels,but she does not know what her income will be next year.There is a 40% chance her income will be $20,000,a 40% chance her income will be $30,000,and a 20% chance her income will be $40,000.What is her expected income?
A)$28,000
B)$29,000
C)$30,000
D)$31,000

Question

Use the following to answer question: 
-(Table: Income and Utility for Tyler)Use Table: Income and Utility for Tyler.The table shows the utility Tyler receives at various income levels,but she does not know what her income will be next year.There is a 40% chance her income will be $20,000,a 40% chance her income will be $30,000,and a 20% chance her income will be $40,000.What is her expected income?
A)$28,000 
B)$29,000 
C)$30,000 
D)$31,000

Quizplus · Accepted Answer

To calculate the expected income, multiply each income level by its probability and sum the results: (0.40 * $20,000) + (0.40 * $30,000) + (0.20 * $40,000) = $8,000 + $12,000 + $8,000 = $28,000.

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