Question 1125529
3500 tickets are sold.
each ticket costs $4.00.
1 ticket will get you a prize worth 2780.
1 ticket will get you a prize worth 940.
30 tickets will get you a gift certificate worth 35 each.


the probability of having to pay for a ticket is 1.
the probability of getting the ticket worth 2700 is 1/3500.
the probability of getting the ticket worth 940 is 1/3500.
the probability of getting one of the tickets worth 35 is 30/3500.


your expected value is 1 * -4 + 1/3500 * 2780 + 1/3500 * 940 + 30/3500 * 35.


that gets you an expected value of -2.637142857.


you gave them 4 dollars and your expected prize money was 1.362857143.


your net value was -4 + 1.362857143 = -2.637142857.


what does this mean?


assume you bought all 3500 tickets.


you would have paid 3500 * 4 = 14,000 dollars.
you would get back 2780 + 940 + 30 * 35 = 4,770 dollars.


you would have netted 4,770 - 14,000 = -9230 dollars.


divide that by 3500 tickets and the average net would be -2.637142857 dollars.