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

A) not play since she never wins anything.
B) play if the cost of playing the game is greater than the expected value of the payoff.
C) compare the cost of playing the game with the value of her time.
D) play if the cost of playing the game is less than the expected value of the payoff.