Baffin Bay, located between Canada and Greenland, is being explored for oil and natural gas. First, an energy company conducts a geological survey, and if the data look promising it starts drilling. After one area’s recent survey, which cost $65 million, the geologists and engineers came to a consensus that drilling a first well would be successful with a probability of 0.2. Company data from previous drilling indicate that if the first well is successful, the probability of the second well being successful in this area is increased from 0.2 to 0.6.

a) Which method of probability assessment did the engineers and geologists use to estimate the probability of the first well’s success?

b) Which method of probability assessment did the engineers and geologists use to estimate the probability of the second well’s success?

c) Which of these probabilities is a conditional probability?