Answer to Question #298384 in Economics for Krystel

Question

A lottery ticket pays off 300,000,000 pesos is made available for 10,000,000 tickets. Each ticket costs 50 pesos. Supposed the variable X gives the net winnings from playing the lottery. What is the expected gain for joining the lottery with only one ticket?

Answer 1

The expected gain for joining the lottery with only one ticket is:

$EG = 300,000,000×1/10,000,000 - 50×(1 - 1/10,000,000) = -20.$