A team of oil planners estimates that there is a 70 probabil

A team of oil planners estimates that there is a 70% probability of finding oil in a certain location. Seismic tests have shown favorable results. If there really is oil, the probability that the test will be favorable is .9 and if there is no oil, the probability that the test will be favorable is .2. What is the probability that there is in fact oil in the region?

Please show step-by-step work. I am trying to understand the question and how to solve.

Solution

Pretty sure this is a trick question. But I would think the answer is 70%. My reasoning is as follows. They start by saying the probability of finding oil anywhere is 70%. Then they start rambling about these Seismic tests, but they never explain what exactly the tests are or what they do or what they are testing for. And I don\'t even know what exactly \"Favorable\" means. Favorable for what side. Therefore, the question is what is the prob. that there is oil in a region, the first sentence says that it is 70%. Hope this makes some sense. Lemme know if I\'m right :p