SOLUTION: Consider an oil company about to drill for oil. The company geologists might state subjective probabilities for finding oil at the given site as follows: P(oil) = P(no oil) = 0.5.

Question 251227: Consider an oil company about to drill for oil. The company geologists might state subjective probabilities for finding oil at the given site as follows: P(oil) = P(no oil) = 0.5. They drill for 500 feet, find no oil, and sample the soil. From past experience, they know the conditional probabilities of finding this type of soil, given the presence or absence of oil: P(this type of soil | oil) = 0.2 and P(this type of soil | no oil) = 0.8. What is the posterior probability of finding oil?
Answer by nyc_function(2741) (Show Source): You can put this solution on YOUR website!
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