2. You have mineral rights on geologist who can assess the promise of the pieced

Question

2. You have mineral rights on geologist who can assess the promise of the piecedictor. If there is probability is 0.95 that a piece of land that you believe may have oil underground. There is you wll strike oil if you drill. Before you drill you might consult a or poor. But she is not a perfect predictor. If there is oil, the conditional she will say prospects are good. If there is no oils, the conditional of land. She can tell you whether your the conditional probability is 0.85 that she will say poor. (a) Using the following definition of appropriate events, ex vents using usual probability notation in terms of these e HO: the land has oil NO: the land has no oil F: the geologist prediction is favorable U: the geologist prediction is unfavorable (b) What is the probability that you strike oil when the geologist predicted your prospects as good

Explanation / Answer

Ans:

a)

P(HO)=0.1

P(NO)=1-0.1=0.9

P(F)=P(good/HO)=0.95

P(U)=P(good/NO)=1-0.85=0.15

b)

P(good)=P(good/HO)*P(HO)+P(good/NO)*P(NO)

=0.95*0.1+(1-0.85)*0.9

=0.23

P(HO/good)=P(good/HO)*P(HO)/P(good)

=0.95*0.1/0.23

=0.413

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