Preliminary geologic studies


An oil company purchased option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities. P(high quality oil) = 0.50 P(medium quality oil) = 0.20 P(no oil) = 0.30 (a) What is the probability of finding oil? If required, round your answer to two decimal places. P(Oil) = (b) After 200 feet of drilling on the first well, a soil test is made. The probabilities of finding the particular type of soil identified by the test are 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 input in the box below will not be graded, but may be reviewed and considered by your instructor. What are the revised probabilities, and what is the new probability of finding oil? If required, round your answer to two decimal places.

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Basic Statistics: Preliminary geologic studies
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