An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil) = 0.55 P(medium-quality oil) = 0.20 a. What is the probability of finding oil (to 2 decimals)? P(no oil) = 0.25 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) = 0.25 P(soil medium-quality oil) = 0.85 P(soil no oil) = 0.25 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? Select your answer -
An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil) = 0.55 P(medium-quality oil) = 0.20 a. What is the probability of finding oil (to 2 decimals)? P(no oil) = 0.25 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) = 0.25 P(soil medium-quality oil) = 0.85 P(soil no oil) = 0.25 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? Select your answer -
Chapter8: Sequences, Series,and Probability
Section: Chapter Questions
Problem 41CT: On a game show, a contestant is given the digits 3, 4, and 5 to arrange in the proper order to form...
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Transcribed Image Text:An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities.
P(high-quality oil) = 0.55
P(medium-quality oil) = 0.20
a. What is the probability of finding oil (to 2 decimals)?
P(no oil) = 0.25
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) = 0.25
P(soil medium-quality oil) = 0.85
P(soil no oil) = 0.25
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?
Select your answer -
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