Bayes’ Theorem Exercise 1
1. An oil company purchased an option on land in Rivers. Preliminary geologic studies
assigned the following prior probabilities.
P (high quality oil) = 0.50
P (medium quality oil) = 0.20
P (no oil) = 0.30
(a) What is the probability of finding oil?
(b) After 200 feet of drilling on the first well, a soil test is made. The probabilities of
finding the particular type of soil identified by the test are
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? What are the revised probabilities, and
what is the new probability of finding oil?
2. Bayes’ theorem and conditional probability can be used in medical diagnosis. Prior
probabilities of diseases are based on the physician’s assessment of factors such as ge-
ographic location, seasonal influence, and occurrence of epidemics. Assume that a pa-
tient is believed to have one of two diseases, denoted D1 and D2 , with P (D1 ) = 0.60
an P (D2 ) = 0.40, and that medical research shows a probability associated with each
symptom that may accompany the diseases. Suppose that, given diseases D1 and D2 ,
the probabilities that a patient will have symptoms S1 , S2 , or S3 are as follows:
Symptoms
S1 S2 S3
D1 0.15 0.10 0.15
Disease
D2 0.80 0.15 0.03
[Note: The entries are conditional probabilities. Example P (S3 |D1 ) = 0.15.] After
finding that a certain symptom is present, the medical diagnosis may be aided by finding
the revised probabilities that the patient has each particular disease. Compute the
posterior probabilities of each disease for the following medical findings.
(a) The patient has symptom S1 .
(b) The patient has symptom S2 .
(c) The patient has symptom S3 .
(d) For the patient with symptom S1 in part (a), suppose that symptom S2 also is
present. What are the revised probabilities of D1 and D2 ?
February 15, 2025 Page 1 of 2
Bayes’ Theorem Exercise 1
3. The prior probabilities for events A1 , A2 , and A3 are P (A1 ) = 0.20, P (A2 ) = 0.50,
and P (A3 ) = 0.30. The conditional probabilities of event B given A1 , A2 , and A3 are
P (B|A1 ) = 0.50, P (B|A2 ) = 0.40, and P (B|A3 ) = 0.30.
(a) Compute P (B ∩ A1 ), P (B ∩ A2), and P (B ∩ A3 ).
(b) Use the tabular approach to applying Bayes’ theorem to compute P (A1|B), P (A2|B),
and P (A3 |B).
4. A consulting firm submitted a bid for a large research project. The firm’s management
initially felt there was a 50/50 chance of getting the bid. However, the agency to which
the bid was submitted subsequently requested additional information on the bid. Expe-
rience indicates that on 75% of the successful bids and 40% of the unsuccessful bids the
agency requested additional information.
(a) What is the prior probability that the bid will be successful (i.e., prior to receiving
the request for additional information)?
(b) What is the conditional probability of a request for additional information given
that the bid will ultimately be successful?
(c) Compute a posterior probability that the bid will be successful given that a request
for additional information has been received.
5. Companies that do business over the Internet can often obtain probability information
about website visitors from previous websites visited. For instance, Duber created a
website to market golf equipment and apparel, and the organization has collected data
from its website visitors. Management would like a certain offer to appear for female
visitors and a different offer to appear for male visitors. A sample of past website visits
indicates that 60% of the visitors to [Link] are male and 40% are female.
(a) What is your prior probability that the next visitor to the website will be female?
(b) Suppose you know that the current visitor previously visited the Duber website and
that women are three times as likely to visit this website as men. What is your
revised probability that the visitor is female? Should you display the offer that has
more appeal to female visitors or the one that has more appeal to male visitors?
6. The Wayne Manufacturing Company purchases a certain part from suppliers A, B, and
C. Supplier A supplies 60% of the parts, B 30%, and C 10%. The quality of parts varies
among the suppliers, with A, B, and C parts having 0.25%, 1%, and 2% defective rates,
respectively. The parts are used in one of the company’s major products.
(a) What is the probability that the company’s major product is assembled with a
defective part? Use the tabular approach to Bayes’ theorem to solve.
(b) When a defective part is found, which supplier is the likely source?
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