According to a survey of American households, the probability that the residents own 2 cars if annual household income is over $25,000 is 80%. Of the households surveyed, 60% had incomes over $25,000 and 70% had 2 cars. What is the probability that the residents of a household own 2 cars and have an income less than or equal to $25,000 a year?
A) 0.22
B) 0.48
C) 0.12
D) 0.18

Question

Quizplus · Accepted Answer

P(2 cars | income <= $25,000) = P(2 cars and income <= $25,000) / P(income <= $25,000)= (P(2 cars) - P(2 cars | income > $25,000) * P(income > $25,000)) / (1 - P(income > $25,000))= (0.7 - 0.8 * 0.6) / (1 - 0.6)= 0.22

According to a Survey of American Households, the Probability That