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

P(high-quality oil)	=	0.40
P(medium-quality oil)	=	0.20
P(no oil)	=	0.40

If required, round your answers to two decimal places.

(a)

What is the probability of finding oil?

(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 as follows.

P(soil | high-quality oil)	=	0.20
P(soil | medium-quality oil)	=	0.80
P(soil | no oil)	=	0.20

How should the firm interpret the soil test?

The probability of finding oil is good. Given the probability of finding good soil, the oil company is more likely to find - Select your answer -medium-qualityhigh-qualitynoItem 2 oil.

What are the revised probabilities?

Events	P(Ai)	P(S | Ai)		P(Ai S)		P(Ai | S)
High Quality (A1)
Medium Quality (A2)
No Oil (A3)
			P(S)=