Problem 130

Problem 130

Sam bought 1 of 250 tickets selling for $2 in a game with a grand prize of $400.

Was $2 a fair price to pay for a ticket to play this game?  Explain.

 

Solution

 

No, $2 was not a fair price for a ticket because expected value of ticket is less than $2.

prize money is $400

so ticket price should be \frac{400}{250} = $1.60

 

 

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