Questions 7 and 8 refer to the following information: From data gathered last ye

Question

Questions 7 and 8 refer to the following information: From data gathered last year, it has been determined that the probability of a family owning two cars is 70 percent. For families owning two cars, there is a 70 percent chance that their annual income is greater than $90000. Of the families that do not own two cars, only 10 percent will have an annual income greater than $90000. ANSWER A, B, C or D

Question 7 For a randomly selected family, what is the probability the family either owns two cars or their annual income is greater than $90000?

(a) 0.73

(b) 0.70

(c) 0.51

(d) 0.49

Question 8 If a family whose annual income is greater than $90000 is randomly selected, what is the probability that the family did not own two cars?

(a) 0.058

(b) 0.030

(c) 0.700

(d) 0.100

Explanation / Answer

Q7) P(Owns two cars and annual income is greater than $90000) = 0.70*0.70 = 0.49

P(annual income is greater than $90000) = 0.70*0.70+0.10*0.30 = 0.52

P(Owns two cars or annual income is greater than $90000) = 0.70+0.52-0.49 = 0.73

Option A is Correct

Q8) P(did not own two cars/annual income is greater than $90000) = (0.10*0.30)/0.52 = 0.058

Option A is Correct

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