Answer
The relative frequency approach to probability is being used.
Work Step by Step
There are two outcomes for a randomly selected family from Los Angeles: "earns more than 175,000 dollars a year" or "earns less than 175,000 dollars a year". These two outcomes are not equally likely. Hence, the experiment is repeated again and again and we will use the relative frequency approach to probability.
Suppose a random sample of 1000 families from Los Angeles are selected and observes that 490 of them earn more than 175,000 dollars a year, and 510 of them earn less than that. Then,
n = sample size = 1000
f = number of families who earn 175,000 dollars a year = 490
P(a randomly selected family earns more than 175,000) =$\frac{f}{n}$ = $\frac{490}{1000} = 0.49$
