document.write( "Question 1076925: Eight hundred chances are sold at $6 apiece for a raffle. There is a grand prize of $700, two second prizes of $300, and five third prizes of $100. First calculate the expected value of the lottery. Determine whether the lottery is a fair game. If the game is not fair, determine a price for playing the game that would make it fair. \n" ); document.write( "

Algebra.Com's Answer #691508 by alanc(27) $\"\"$ $\"About$

You can put this solution on YOUR website!
Eight hundred chances are sold at $6 apiece for a raffle. There is a grand prize of $700, two second prizes of $300, and five third prizes of $100. First calculate the expected value of the lottery. Determine whether the lottery is a fair game. If the game is not fair, determine a price for playing the game that would make it fair.
\n" ); document.write( "---------------------
\n" ); document.write( "let the variable be x : = Dollar Prize outcome of a ticket.\r
\n" ); document.write( "\n" ); document.write( "E[x] = $700*(1/800) + $300*(2/800) + $100 * (5/800)\r
\n" ); document.write( "\n" ); document.write( "E[x] = (700 + 600 + 500)/800 = 1800 / 800 = $2.25\r
\n" ); document.write( "\n" ); document.write( "Your expected prize value from a ticket is $2.25\r
\n" ); document.write( "\n" ); document.write( "This is NOT a fair game because the expected value of the lottery is $2.25, which is lower than the cost of buying a ticket at $6 .
\n" ); document.write( "If the price for playing the game was less than or equal to $2.25, then the game would be fair. \n" ); document.write( "

\n" );