An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil)=0.45 P(medium-quality oil)=0.25 P(no oil)=0.30 a. What is the probability of finding oil? (to 2 decimals) b. After 200 feet of drilling on the first well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are given below. P(soil|high-quality oil)=0.20 P(soil|medium-quality oil)=0.80 P(soil|no oil)=0.20 Given the soil found in the test, use Bayes' theorem to compute the 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 of oil that is most likely to be found?

College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
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An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities.

P(high-quality oil)=0.45

P(medium-quality oil)=0.25

P(no oil)=0.30

a. What is the probability of finding oil? (to 2 decimals)

b. After 200 feet of drilling on the first well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are given below.

P(soil|high-quality oil)=0.20

P(soil|medium-quality oil)=0.80

P(soil|no oil)=0.20

Given the soil found in the test, use Bayes' theorem to compute the 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 of oil that is most likely to be found?

 

 

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