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.Jack is considering whether to play the first game.If Jack only cares about the expected value of the outcome and does not care about risk,he should:

A) not play the game, since it costs $5 and the expected payoff is $5.75.
B) play the game since it costs $5, and the expected payoff is $5.75.
C) play the game since it costs $5.75 and the expected payoff is $5.
D) not play the game since it costs $5.75 and the expected payoff is $5.