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In: Statistics and Probability

The state in which you live operates a lottery. The proceeds of the lottery are used...

The state in which you live operates a lottery. The proceeds of the lottery are used to supplement the state’s unemployment insurance fund. You can play the lottery for $1 per chance. To play, you choose a three-digit number from 000 to 999, inclusive, and receive an official ticket with that number printed on it. Each evening, a ball is drawn blindly from a container that holds 1,000 balls, each marked with a different three-digit number. If the number on your ticket is selected in the daily drawing on the date you play, you receive $500 for your ticket. Otherwise, you receive nothing. a. Suppose you buy one ticket. What is the probability that your number will win? b. What is the expected utility (in dollars) of a single play? c. Suppose you decide to play three times in one day, and you choose the same numbers each time. (You hold three tickets at a cost of $3.) What is the expected utility (in dollars) of your triple play? d. Suppose you decide to play three times in one day, and you choose different numbers each time. What is the expected utility (in dollars) of this triple play?

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orchestra answered 1 year ago
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