Problem D, Questions 1-3 Based probability on geological studies done on land in

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Problem D, Questions 1-3 Based probability on geological studies done on land in East Texas, a petroleum company believes the of finding high-quality oil is 31%, medium-quality oil is 43%, and no oil is 26%. ng can be expensive, the petroleum company also plans on doing a solil test in soil types are more apt to detect the presence and quality of oil). For example, the certa petroleum company knows that in 13% of high-quality oil finds, 9% of medium-quality oil finds, and 4% of no oil finds, the soil is Type A. So, for this East Texas land 1. Find the probability that high-quality oil is found given the soil was not Type A. 2. Find the probability the soil was not Type A is found. 3. Find the probability oil is found given the soil was Type A. Problem E, Questions 1-6 The quality rating and typical meal price were collected for a sample of 600 Houston restaurants. (SEE EXCEL OUTPUT, APPENDIX 2) Ipatin P(Ratinga Good AND 5

Explanation / Answer

1) P ( high quality oil is found and given that soil is not type A ) = P ( Soil is high quality ) / P ( soil is not type A)

= 0.31 / ( 1- 0.13+0.04 +0.09)

= 0.31 / ( 1 - 0.26)

= 0.42

2) P ( soil is not type A or no oil is found) = P( soil is not type A ) * P( no oil is found)

= (1-0.26) * (0.26)

= 0.19

3) P ( oil is found given the soil is type A ) = P ( soil is type A ) / P ( high quality oil + medium quality oil)

= ( 0.13 + 0.04 +0.09 ) / 0.31 +0.43

= 0.35

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