According to recent estimates, the likelihood that an individual who earns less than $200,000 will be audited by the Internal Revenue Service is 1%; the chance that an individual making $200,000 to $1 million will be audited is put at 2.7%; and the chance that a person making over $1 million will be audited is 8.4%. Assume that these estimates are accurate. Suppose now you randomly choose three individuals, one in each of the three income categories. Defining “number of individuals in the group who will be audited” as your random variable,
a. show all the possible values for the random variable.
b. show the full probability distribution by assigning appropriate probabilities to all possible values of the random variable.