Textbook Problem

The state of California defines family income groups in terms of median county income as follows:

Extremely low income: below 30% of county median income

Very Low income: between 30o/o and 50% of county median income

Low income: between 50% and 80o/o of county median income

Moderate income: between 80% and 120% of county median income

For San Luis Obispo county, the median household income in 2015 was $60,691 (slohealthcounts.org/indicators/index/view?indicatorld=315&1ocaleld=277, retrieved March 18, 2018).

1. a. Interpret the value of the median household income in 2015 for San Luis Obispo County.
2. b. Each of the following statements is incorrect. For each statement, use the given information to explain why it is incorrect.

Statement 1: 30% of the households in San Luis Obispo County would be classified as extremely low income.

Statement 2: More than 50% of the households in San Luis Obispo County would be classified as extremely low income or very low income.

Statement 3: There cannot be any households in San Luis Obispo County that would be classified as having an income that was greater than those in the moderate-income category.