Question

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

P(high-quality oil)=0.45
p(medium-quality oil)=0.15
p(no oil)=0.40
a. What is the probability of finding oil (to 2 decimals)?
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.

Answer 1

The probability of finding oil on the land in Alaska is calculated by summing the probabilities of finding high-quality and medium-quality oil, resulting in a total probability of 0.60 or 60%. Without further information, we cannot answer the second part regarding the updated probabilities after a soil test.

Step-by-step explanation:

The question asks about calculating probabilities related to geological studies for an oil company's land in Alaska. There are two parts to the question:

• a. The probability of finding oil is the sum of the probabilities of finding high-quality oil and medium-quality oil, which are given as P(high-quality oil) = 0.45 and P(medium-quality oil) = 0.15. The probability of finding oil (to 2 decimals) would thus be the sum of these two probabilities: 0.45 + 0.15 = 0.60, or 60%.
• b. The second part of the question seems to be incomplete, as there are no follow-up probabilities provided to calculate the updated probability after a soil test. Without additional information or context, this cannot be addressed.

Overall, the focus is on determining the probability of various outcomes given a set of prior probabilities and incorporating additional evidence in a Bayesian manner if given.