A grocery chain runs a prize game by giving each customer a ticket that may win a prize when a box is scratched. Printed on the ticket are the following probabilities for a customer who shops once a week:

If several thousand customers play the grocery store game, you expect that the mean amount they win will be close to
A) the probability of winning something.
B) the median amount they win.
C) the expected value of a customer's winnings.
D) $100.

Question

A grocery chain runs a prize game by giving each customer a ticket that may win a prize when a box is scratched. Printed on the ticket are the following probabilities for a customer who shops once a week:

If several thousand customers play the grocery store game, you expect that the mean amount they win will be close to

If several thousand customers play the grocery store game, you expect that the mean amount they win will be close to
A) the probability of winning something. 
B) the median amount they win. 
C) the expected value of a customer's winnings. 
D) $100.

Quizplus · Accepted Answer

The expected value is calculated by multiplying each prize amount by its probability, and then adding up all the values. Since the mean amount is an average of the winnings, it is expected to be close to the expected value of the winnings. Therefore, C is the best choice. A is incorrect because the probability of winning something does not take into account the prize amounts. B is incorrect because the median amount does not consider the probability of winning each amount. D is incorrect because there is no information to support a mean amount of $100.

A Grocery Chain Runs a Prize Game by Giving Each