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Author Question: In 2006 the Texas Two Step lottery had hit an all-time high jackpot of 2.9 million. If the odds of ... (Read 56 times)

SAVANNAHHOOPER23

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on: Jun 29, 2018
In 2006 the Texas Two Step lottery had hit an all-time high jackpot of 2.9 million. If the odds of winning the jackpot are 1.8 million to one and the cost of one lottery ticket is 1.00 is this a fair game? Explain.
 
  What will be an ideal response?

Question 2

What assumptions lead to the conclusion that final products are distributed efficiently among households?
 
  What will be an ideal response?


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bubulittle310@msn.cn

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Reply #1 on: Jun 29, 2018
Answer to Question 1

For it to be a fair game the expected value of the jackpot would have to be greater than the price of a ticket. The expected value is the payoff of 2.9 million times a probability of 1.8 million to one. This come to 1.69 which makes it a fair game considering the price of a ticket if 1.00

Answer to Question 2

People have different tastes and preferences, and they buy very different things in very different combinations. As long as everyone shops freely in the same markets, no redistribution of outputs among people will make them better off. Therefore the distribution of goods among households is efficient.


SAVANNAHHOOPER23

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

cam1229

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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