A Person Is Trying to Decide If They Should Buy

Multiple Choice

A person is trying to decide if they should buy a lottery ticket. The ticket costs $2.00. If the ticket is a winner, the prize would be $1,000. Knowing that winning $1,000 is not a certain outcome (state of nature) , the person finds that the probability of winning is 0.001. Based on this information, the following payoff table can be constructed: What is the probability of losing $2.00?

A) 0.001
B) 0.999
C) 1.00
D) Cannot be computed