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.If Jack cares only about expected value, and does not mind risk, he should decide to play the game in which the expected value of the payoff is:

A) higher than the price to play the game.
B) lower than the price to play the game.
C) higher than the expected value of the payoff in the other game.
D) double the price to play the game.