In a Carnival Game, a Person Wagers $2 on the Roll

question 60

Multiple Choice

In a carnival game, a person wagers $2 on the roll of two dice. If the total of the two dice is 2, 3, 4, 5, or 6 thenthe person gets $4 (the $2 wager and $2 winnings) . If the total of the two dice is 8, 9, 10, 11, or 12 then theperson gets nothing (loses $2) . If the total of the two dice is 7, the person gets $0.75 back (loses $0.25) . What isthe expected value of playing the game once?

• A) -$0.04
• B) -$0.42
• C) $2.00
• D) $0.00

---

Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much revenue is contributing to fixed costs and profit.

Margin Ratio

A financial metric that compares a company's gross profit margin to its revenue, indicating the percentage of sales revenue that remains after accounting for the cost of goods sold.

Contribution Margin

The amount by which product sales revenue exceeds variable costs, showing how much contributes to covering fixed costs and generating profit.

Fixed Costs

Business expenses that do not change regardless of the level of production or sales activities, such as rent, salaries, and insurance.