The incomes of all families in a particular suburb can be represented by a continuous random variable. It is known that the median income for all families in this suburb is $60,000 and that 40% of all families in the suburb have incomes above $72,000.a. For a randomly chosen family, what is the probability that its income will be between $60,000 and $72,000?b. Given no further information, what can be said about the probability that a randomly chosen family has an income below $65,000?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
The incomes of all families in a particular suburb can be represented by a continuous random variable. It is known that the
a. For a randomly chosen family, what is the
b. Given no further information, what can be said about the probability that a randomly chosen family has an income below $65,000?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
