An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil) = 0.35 P(medium-quality oil) = 0.20 P(no oil) 0.45 If required, round your answers to two decimal places. (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 are as follows. P(soil | high-quality oil) = 0.20 P(soil | medium-quality oil) = 0.80 P(soil | no oil) = 0.20 How should the firm interpret the soil test? The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find - Select your answer What are the revised probabilities? Events High Quality (A1) Medium Quality (A2) No Oil (A3) P(A₁) What is the new probability of finding oil? P(S | A₁) P(S)= P(Ains) P(Ai | S) oil.
An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high-quality oil) = 0.35 P(medium-quality oil) = 0.20 P(no oil) 0.45 If required, round your answers to two decimal places. (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 are as follows. P(soil | high-quality oil) = 0.20 P(soil | medium-quality oil) = 0.80 P(soil | no oil) = 0.20 How should the firm interpret the soil test? The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find - Select your answer What are the revised probabilities? Events High Quality (A1) Medium Quality (A2) No Oil (A3) P(A₁) What is the new probability of finding oil? P(S | A₁) P(S)= P(Ains) P(Ai | S) oil.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Transcribed Image Text:6.
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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) = 0.35
P(medium-quality oil) = 0.20
P(no oil) = 0.45
•
O
If required, round your answers to two decimal places.
(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 are as follows.
P(soil | high-quality oil) = 0.20
P(soil | medium-quality oil) = 0.80
P(soil | no oil) = 0.20
How should the firm interpret the soil test?
The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find Select your answer - ✓oil.
What are the revised probabilities?
Events
High Quality (A1)
Medium Quality (A2)
No Oil (A3)
P(Ai)
What is the new probability of finding oil?
P(S | A₁)
P(S)=
P(A₁n S)
P(AI | S)
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