An oil company purchased an option on land in Alaska.Preliminary geologic studies assigned the following priorprobabilities:
P(high-quality oil) = .3
P(medium-quality oil) =.5
P(no oil) = .2
a. What is the probability of finding oil (to 1 decimal)?______
b. After 200 feet of drilling on the first well, a soil test istaken. The probabilities of finding the particular type of soilidentified by the test are given below:
P(soil/high-quality oil) = 0.3
P(soil/medium-quality oil) = 0.5
P(soil/no oil) = 0.2
Given the soil found in the test, use Bayes' theorem to computethe following revised probabilities (to 4 decimals).
P(high-quality oil/soil) = _____
P(medium-quality oil/soil) = _____
P(no oil/soil) = ______
What is the new probability of finding oil (to 4 decimals)?_____
According to the revised probabilities, what is the quality ofoil that is most likely to be found?
^High quality, medium quality, or no oil?
