You are offered a chance to buy a ticket in a lottery. You have a one in ten chance of winning this lottery. If you win, your name will be entered along with 399 other winners as an entrant in a second lottery. All the entrants in the second lottery have an equal chance of winning the single prize, a sportscar valued at $400 000. What is the most it would be rational for you to pay for a ticket in the first lottery?
A)$10
B)$40
C)$100
D)$400
E)$1 000

Question

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The Answer of You are offered a chance to buy a ticket in a lottery. You have a one in ten chance of winning this lottery. If you win, your name will be entered along with 399 other winners as an entrant in a second lottery. All the entrants in the second lottery have an equal chance of winning the single prize, a sportscar valued at $400 000. What is the most it would be rational for you to pay for a ticket in the first lottery?
A)$10
B)$40
C)$100
D)$400
E)$1 000

You Are Offered a Chance to Buy a Ticket in a Lottery