Consider a state lottery that has a weekly television show. On this show, a contestant receives the opportunity to win $1 million. The contestant picks from four hidden windows. Behind each is one of the following: $225,000, $300,000, $1 million, or a "stopper." Before beginning, the contestant is offered $400,000 to stop. Mathematically speaking, should the contestant take the $400,000?
A) yes
B) I don't know
C) doesn't matter
D) no

Question

Consider a state lottery that has a weekly television show. On this show, a contestant receives the opportunity to win $1 million. The contestant picks from four hidden windows. Behind each is one of the following: $225,000, $300,000, $1 million, or a "stopper." Before beginning, the contestant is offered $400,000 to stop. Mathematically speaking, should the contestant take the $400,000? ​
A) yes
B) I don't know
C) doesn't matter
D) no

Quizplus · Accepted Answer

The expected value of playing is calculated by averaging the possible outcomes: (225,000 + 300,000 + 1,000,000 + 0) / 4 = $381,250. Since $400,000 is greater than the expected value of $381,250, the contestant should take the $400,000 offer.

Consider a State Lottery That Has a Weekly Television Show