An oil company purchased an option on land in Alaska. Preliminary geologic studies assigned the following prior probabilities.
P(high-quality oil) | = | 0.30 |
P(medium-quality oil) | = | 0.20 |
P(no oil) | = | 0.50 |
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. | ||||||||||||||||||||||||||||||||||||
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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 -medium-qualityhigh-qualitynoItem 2 oil. | |||||||||||||||||||||||||||||||||||||
What are the revised probabilities? | |||||||||||||||||||||||||||||||||||||
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What is the new probability of finding oil? |
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