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,they win $20 and if it is blue,they win $1.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;if it is red,they win $20;if it is blue,they win $5;and if it is green,they win $1.Both games cost $5 to play.Assume Jack will play the games that have a higher expected payoff than the cost of playing the game.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 first but not the second.
B) play the second but not the first.
C) play neither.
D) play both.