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An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following...

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Statistics

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?

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