Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, $20 is won, and if it is blue, $1 is won. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; $20 is won if it is red, $5 is won if it is blue, and $1 is won if it is green. Both games cost $5 to play.Jack will play a game if the expected payoff is higher than the cost of playing. Comparing the expected value of the payoff of each game to the price of $5 to play, we can conclude that Jack should:
A) play the second game, but not the first.
B) play neither game.
C) play the first game, but not the second.
D) play both games.
Correct Answer:
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