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1. Education and income. Call a household prosperous if its income exceeds $100,000. Call the household educated if the householder completed college. Select an American household at random, and let A be the event that the selected household is prosperous and B the event that it is educated. According to the Current Population Survey, P(A) = 0.138, P(B) = 0.261, and the probability that a household is both prosperous and educated is P(A andB) = 0.082. What is the probability P(A or B) that the household selected is either prosperous or educated?
2. Find a conditional probability. In the setting of the previous exercise, what is the conditional probability that a household is prosperous, given that it is educated? Explain why your result shows that events A and B are not independent.
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