Analyze the decision whether to buy a lottery ticket or not

Reference no: EM13687036

The state lottery sells 10 million tickets, one of which is a winner. The winning ticket pays the holder $5 million; all other lottery tickets are losers and pay $0. The price of each ticket is $1. Analyze the decision whether to buy a lottery ticket or not, using expected value theory. Suppose risk neutrality.

Reference no: EM13687036

Questions Cloud

Obtain how much charge passes through the starter motor : The starter motor of a car engine draws a current of 200A from the battery. The copper wire to the motor is 4.60mm in diameter and 1.2 m long. How much charge passes through the starter motor

The funds acquired from the sale of a financial asset : Which of the following statements about the financial and real sectors is true? If the financial sector causes more to flow into spending than is saved, most likely: Flows that do not enter the spending stream enter the financial sector in the form o..

Marginal benefits from watching movies are exactly the same : Suppose there are two individuals (person A and person B) who have the same preference for Kramer IMAX Theatre, i.e. their marginal benefits from watching movies are exactly the same and the more they watch the lower the satisfaction (benefit) they g..

What is the unemployment rate : Suppose that total employment in the U.S. economy increased from 143,000,000 to 145,500,000 from last year. At the same time, the number of unemployed dropped from 11,000,000 to 8,700,000. Also suppose that the working age population increased from 2..

Analyze the decision whether to buy a lottery ticket or not : The state lottery sells 10 million tickets, one of which is a winner. The winning ticket pays the holder $5 million; all other lottery tickets are losers and pay $0. The price of each ticket is $1. Analyze the decision whether to buy a lottery ticket..

Increase wages and reduce the marginal expense of labor : Minimum wage laws help low-wage workers because they simultaneously increase wages and reduce the marginal expense of labor. Analyze this statement

Scalping of tickets for event is a sign that at state price : The scalping of tickets for an event is a sign that at the stated price on the ticket, the: Supply of tickets has increased

Presume the government imposes a tariff on all imports : Presume the government imposes a tariff on all imports. Use the DD-AA models to analyze the effects this measure would have on the economy. Analyze both temporary and permanent tariffs.

Gasoline can be utilized to power a flex fueled car : Ethanol blended with gasoline can be utilized to power a flex fueled car. One particular blend that is gaining in popularity is E 85, which is 85 percent ethanol and 15 percent gasoline. E 85 is 80 percent cleaner burning than gasoline alone, and it ..

User Account

All Pages