Suppose Jack and Kate Are at the Town Fair and Are

Multiple Choice

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 decides to play the first game and Kate decides to play the second game. The expected value of the payoff:

A) is higher for Jack than for Kate.
B) is lower for Jack than for Kate.
C) is the same for both Jack and Kate, because there's only one red marble.
D) is higher for Kate because there is a greater chance of being reimbursed for the cost of the game.