Gamble A results in $10 with probability 0.4 and $30 with probability 0.6.Gamble B results in $20 with probability 1.If an individual prefers Gamble A to Gamble B, the independence axiom implies that he prefers Gamble C that gives $0 with probability 0.5, $10 with probability 0.2 and $30 with probability 0.3 to Gamble D that results in $20 with probability 0.5 and $0 with probability 0.5.

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The independence axiom states that the preference between two gambles is independent of the outcomes of other gambles. In this case, the individual prefers Gamble A to Gamble B, which means that they prefer a gamble with a higher expected value. Gamble C has a higher expected value than Gamble D, so the individual should also prefer Gamble C to Gamble D.

Gamble a Results in $10 with Probability 0