# An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P (high-quality oil) = .50 P (medium-quality oil) = .20 P (no oil) = .30 a. What is the probability of finding oil? 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 follow. P (soil | high-quality oil) = .20 P (soil | medium-quality oil) = .80 P (soil | no oil) = .20 How should the firm interpret the soil test? What are the revised probabilities, and what is the new probability of finding oil? 13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884 13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

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