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 will play a game if the expected payoff is higher than the cost of playing. Comparing the expected value of the payoff of each game to the price of $5 to play, we can conclude that Jack should:

A) play the second game, but not the first.
B) play neither game.
C) play the first game, but not the second.
D) play both games.