Audit and low income: Table 5.3 on audit status and income isshown below. Show h

Question

Audit and low income: Table 5.3 on audit status and income isshown below. Show how to find the probability of: a. Being audited given that the taxpayer is in thelowest income category.     My answer:.0011+.1748=.1758      .1758/.0011=159.58 b. Being in the lowest income category given that thetaxpayer is audited.     My answer:.0011+.0039=.005   .005/.0039=1.28                                                          Audited                                                     Yes               No Income                <$25,000                                    0.0011         0.1747 $25,000-$49,999                        0.0009         0.3819 $50,000-$99,999                        0.0009         0.3071 >$100,000                                   0.0010         0.1324 Because these are all percentages, I believe that theprobability can't be greater than 1. Therefore, I think I got thisproblem wrong. I need help on how to do this problemcorrectly. Audit and low income: Table 5.3 on audit status and income isshown below. Show how to find the probability of: a. Being audited given that the taxpayer is in thelowest income category.     My answer:.0011+.1748=.1758      .1758/.0011=159.58 b. Being in the lowest income category given that thetaxpayer is audited.     My answer:.0011+.0039=.005   .005/.0039=1.28                                                          Audited                                                     Yes               No Income                <$25,000                                    0.0011         0.1747 $25,000-$49,999                        0.0009         0.3819 $50,000-$99,999                        0.0009         0.3071 >$100,000                                   0.0010         0.1324 Because these are all percentages, I believe that theprobability can't be greater than 1. Therefore, I think I got thisproblem wrong. I need help on how to do this problemcorrectly.

Explanation / Answer

a) What fraction of those in the lowest income category areaudited? Total in lowest income: .0011+.1747=.1758 Fraction audited = .0011/.1758=.006257 (It's important to note here the fraction of those audited must beless than or equal to 1, because at most everybody can beaudited.) b) What fraction of those audited are in the lowest incomecategory? Total audited= .0011 + .0009 +.0009 + .0010 = .0040 Fraction in lowest income and audited = .0011/ .0040 = .275

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