Act like a helpful tutor and exlain me :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) = 0.25
P(no oil) = 0.30
a. What is the probability of finding oil (to 2 decimals)?
b. After 200 feet of drilling on the frst well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are given below.
P(soil high-quality oil) = 0.15
P(soillmedium-quality oil) = 0.85
P(soillno oil) = 0.15
Given the soil found In the test, use Bayes’ theorem to compute the following revised probabilities (to 4 decimals).
P(high-quality oil soil)
P(medinm-quality oillsoil)
P(no oillsoil)
What is the new probability of finding oil (to 4 decimals)?
According to the revised probabilities, what is the quality of oil that is most likely to be found?
[~ select your answer - +]
Question:
Act like a helpful tutor and exlain me :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) = 0.25
P(no oil) = 0.30
a. What is the probability of finding oil (to 2 decimals)?
b. After 200 feet of drilling on the frst well, a soil test is taken. The probabilities of finding the particular type of soil identified by the test are given below.
P(soil high-quality oil) = 0.15
P(soillmedium-quality oil) = 0.85
P(soillno oil) = 0.15
Given the soil found In the test, use Bayes’ theorem to compute the following revised probabilities (to 4 decimals).
P(high-quality oil soil)
P(medinm-quality oillsoil)
P(no oillsoil)
What is the new probability of finding oil (to 4 decimals)?
According to the revised probabilities, what is the quality of oil that is most likely to be found?
[~ select your answer - +]
This is AI generated Response.
Asked by: Alok Kumar
Created at: 2026-01-28 09:38:22
Final Answer:
RenderedRaw Text
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Sure! Let’s work through this step by step:
---
## **a. Probability of Finding Oil (to 2 decimals)**
The probability of finding **any oil** is the sum of the probabilities of high-quality and medium-quality oil:
\[
P(\text{oil}) = P(\text{high-quality oil}) + P(\text{medium-quality oil})
\]
\[
P(\text{oil}) = .45 + .25 = .70
\]
**Answer:** `.70`
---
## **b. Bayes’ Theorem for Revised Probabilities**
### **Given:**
- \(P(\text{high-quality oil}) = .45\)
- \(P(\text{medium-quality oil}) = .25\)
- \(P(\text{no oil}) = .30\)
- \(P(\text{soil}|\text{high-quality oil}) = .15\)
- \(P(\text{soil}|\text{medium-quality oil}) = .85\)
- \(P(\text{soil}|\text{no oil}) = .15\)
#### **Step 1: Find \(P(\text{soil})\) using the Law of Total Probability**
\[
P(\text{soil}) = P(\text{soil}|\text{high-quality oil})P(\text{high-quality oil}) + P(\text{soil}|\text{medium-quality oil})P(\text{medium-quality oil}) + P(\text{soil}|\text{no oil})P(\text{no oil})
\]
Plug in the values:
\[
P(\text{soil}) = .15 \times .45 + .85 \times .25 + .15 \times .30
\]
\[
= .0675 + .2125 + .045 = .325
\]
---
#### **Step 2: Apply Bayes’ Theorem**
\[
P(A|B) = \frac{P(B|A)P(A)}{P(B)}
\]
##### **1. \(P(\text{high-quality oil}|\text{soil})\):**
\[
P(\text{high-quality oil}|\text{soil}) = \frac{P(\text{soil}|\text{high-quality oil}) \cdot P(\text{high-quality oil})}{P(\text{soil})}
= \frac{.15 \times .45}{.325} = \frac{.0675}{.325} \approx .2077
\]
##### **2. \(P(\text{medium-quality oil}|\text{soil})\):**
\[
P(\text{medium-quality oil}|\text{soil}) = \frac{.85 \times .25}{.325} = \frac{.2125}{.325} \approx .6538
\]
##### **3. \(P(\text{no oil}|\text{soil})\):**
\[
P(\text{no oil}|\text{soil}) = \frac{.15 \times .30}{.325} = \frac{.045}{.325} \approx .1385
\]
---
#### **Step 3: New Probability of Finding Oil**
\[
P(\text{oil}|\text{soil}) = P(\text{high-quality oil}|\text{soil}) + P(\text{medium-quality oil}|\text{soil})
\]
\[
= .2077 + .6538 = .8615
\]
---
### **Step 4: Most Likely Quality of Oil**
- Highest probability after revision: **Medium-quality oil** (\(.6538\))
---
## **Summary Table**
| Probability | Value |
|----------------------------------------|----------|
| \(P(\text{high-quality oil}|\text{soil})\) | .2077 |
| \(P(\text{medium-quality oil}|\text{soil})\) | .6538 |
| \(P(\text{no oil}|\text{soil})\) | .1385 |
| \(P(\text{oil}|\text{soil})\) | .8615 |
---
### **Answers for the Blanks:**
- **a.** `.70`
- **P(high-quality oil|soil):** `.2077`
- **P(medium-quality oil|soil):** `.6538`
- **P(no oil|soil):** `.1385`
- **New probability of finding oil:** `.8615`
- **Most likely oil quality:** `Medium-quality oil`
Let me know if you want any step explained further!
Question:
complete solution not in tabular form
This is AI generated Response.
Asked by: Alok Kumar
Created at: 2026-01-28 09:39:53
Final Answer:
RenderedRaw Text
Did you like this answer?
Sure! Here’s the complete solution without using a table format.
---
## **a. Probability of Finding Oil (to 2 decimals)**
To find the probability of discovering any type of oil, we add the probabilities of high-quality and medium-quality oil:
\[
P(\text{oil}) = P(\text{high-quality oil}) + P(\text{medium-quality oil}) = 0.45 + 0.25 = 0.70
\]
**Answer:** `.70`
---
## **b. Bayes’ Theorem for Revised Probabilities**
### **Given Probabilities:**
- \(P(\text{high-quality oil}) = 0.45\)
- \(P(\text{medium-quality oil}) = 0.25\)
- \(P(\text{no oil}) = 0.30\)
- \(P(\text{soil}|\text{high-quality oil}) = 0.15\)
- \(P(\text{soil}|\text{medium-quality oil}) = 0.85\)
- \(P(\text{soil}|\text{no oil}) = 0.15\)
### **Step 1: Calculate \(P(\text{soil})\)**
Using the Law of Total Probability:
\[
P(\text{soil}) = P(\text{soil}|\text{high-quality oil}) \cdot P(\text{high-quality oil}) + P(\text{soil}|\text{medium-quality oil}) \cdot P(\text{medium-quality oil}) + P(\text{soil}|\text{no oil}) \cdot P(\text{no oil})
\]
Calculating each term:
\[
P(\text{soil}) = 0.15 \times 0.45 + 0.85 \times 0.25 + 0.15 \times 0.30
\]
\[
= 0.0675 + 0.2125 + 0.045 = 0.325
\]
---
### **Step 2: Apply Bayes’ Theorem**
Using Bayes' theorem:
\[
P(A|B) = \frac{P(B|A)P(A)}{P(B)}
\]
#### **1. Calculate \(P(\text{high-quality oil}|\text{soil})\)**
\[
P(\text{high-quality oil}|\text{soil}) = \frac{P(\text{soil}|\text{high-quality oil}) \cdot P(\text{high-quality oil})}{P(\text{soil})}
\]
\[
= \frac{0.15 \times 0.45}{0.325} = \frac{0.0675}{0.325} \approx 0.2077
\]
#### **2. Calculate \(P(\text{medium-quality oil}|\text{soil})\)**
\[
P(\text{medium-quality oil}|\text{soil}) = \frac{P(\text{soil}|\text{medium-quality oil}) \cdot P(\text{medium-quality oil})}{P(\text{soil})}
\]
\[
= \frac{0.85 \times 0.25}{0.325} = \frac{0.2125}{0.325} \approx 0.6538
\]
#### **3. Calculate \(P(\text{no oil}|\text{soil})\)**
\[
P(\text{no oil}|\text{soil}) = \frac{P(\text{soil}|\text{no oil}) \cdot P(\text{no oil})}{P(\text{soil})}
\]
\[
= \frac{0.15 \times 0.30}{0.325} = \frac{0.045}{0.325} \approx 0.1385
\]
---
### **Step 3: Calculate New Probability of Finding Oil**
The new probability of finding any type of oil is:
\[
P(\text{oil}|\text{soil}) = P(\text{high-quality oil}|\text{soil}) + P(\text{medium-quality oil}|\text{soil})
\]
\[
= 0.2077 + 0.6538 = 0.8615
\]
---
### **Step 4: Identify Most Likely Quality of Oil**
The quality of oil that is most likely to be found is determined by the highest probability among the revised probabilities:
- \(P(\text{high-quality oil}|\text{soil}) \approx 0.2077\)
- \(P(\text{medium-quality oil}|\text{soil}) \approx 0.6538\)
- \(P(\text{no oil}|\text{soil}) \approx 0.1385\)
**Most Likely Quality:** `Medium-quality oil`
---
## **Final Answers**
- **a. Probability of finding oil:** `.70`
- **Revised probabilities:**
- \(P(\text{high-quality oil}|\text{soil})\): `.2077`
- \(P(\text{medium-quality oil}|\text{soil})\): `.6538`
- \(P(\text{no oil}|\text{soil})\): `.1385`
- **New probability of finding oil:** `.8615`
- **Most likely quality of oil:** `Medium-quality oil`
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