More and more households are struggling to pay utility bills given a shaky econo

Question

More and more households are struggling to pay utility bills given a shaky economy and high heating costs (The Wall Street Journal, February 14, 2008). Particularly hard hit are households with homes heated with propane or heating oil. Many of these households are spending twice as much to stay warm this winter compared to those who heat with natural gas or electricity. A representative sample of 500 households was taken to investigato if the type of heating influences whether or not a household is delinquent in paying its utility bill. The following table reports the results. Type of Heating Delinquent Natural in Payment? Gas Electricity Heating Oi 15 20 Yes No 50 240 20 130 10 15 [a Clickhere forthe ExcelData File a. What is the probablilty hat a randomly selected household uses heating oifr (Rounp your answer to 2 decimal places.) Probability b. What is the probability that a randomly selected household is delinquent in paying its utility bil? (Round your answer to 2 decimal places.) c. What is the probability that a randomly selected household uses heating oil and is delinquent in paying its utility bill? (Round your answer to 2 decimal places.) Probability

Explanation / Answer

Total households 500

Heating oil users 15+20=35

So probability=35/500=.07

Total failed to pay bill 405

Prob=405/500=.81

There are 15 households that used heating oil but dlinquent to pay bill

So probability=15/500=.03

Total heating oil users 25

Delinquent to pay bill 15

So probability 15/25=.6

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