Answer: 5/6
Explanation: Since we're finding the probability of 1 or 2 people living on the first floor, we need to consider all of the times that either no one lived on the first floor or all three people lived on the first floor and subtract that from 12, which is our sample space.
There are only two cases where three people lived on the first floor. Hence, we have 10/12 times 1 or 2 people are living on the first floor.
This reduces down to a 5 in 6 chance.