In an article about investment alternatives, Money magazine reported that drug s

Question

In an article about investment alternatives, Money magazine reported that drug stocks provide a potential for long-term growth, with over 52% of the adult population of the United States taking prescription drugs on a regular basis. For adults age 65 and older, 83% take prescription drugs regularly. For adults age 18 to 64, 45% take prescription drugs regularly. The age 18–64 age group accounts for 86% of the adult population (Statistical Abstract of the United States, 2008). Round your answers to 4 decimal places. a. What is the probability that a randomly selected adult is 65 or older? b. Given an adult takes prescription drugs regularly, what is the probability that the adult is 65 or older?

Explanation / Answer

Ans:

Given that

P(takes prescription drugs/>=65)=0.83

P(takes prescription drugs/18-64)=0.45

P(18-64)=0.86

P(takes prescription drugs)=0.83*(1-0.86)+0.45*0.86=0.5032

a)P(>=65)=1-0.86=0.14

b)P(>=65/takes prescription drugs)=P(takes perscription drugs/>=65)*P(>=65)/P(takes perscription drugs)

=0.83*0.14/0.5032=0.2309

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