You Are Offered a Chance to Buy a Ticket in a Lottery

question 10

Multiple Choice

You are offered a chance to buy a ticket in a lottery. You have a one in ten chance of winning this lottery. If you win, your name will be entered along with 399 other winners as an entrant in a second lottery. All the entrants in the second lottery have an equal chance of winning the single prize, a sportscar valued at $400 000. What is the most it would be rational for you to pay for a ticket in the first lottery?

• A)$10
• B)$40
• C)$100
• D)$400
• E)$1 000

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Definitions:

Ecchymosis

A discoloration of the skin resulting from bleeding underneath, typically caused by bruising.

Leukoderma

a skin condition characterized by localized or widespread loss of pigmentation, resulting in white patches on the skin.

Keloid

A form of scar that grows excessively, often larger than the original wound, due to an overproduction of collagen.

Eczema

A condition of the skin characterized by redness, itching, and the occurrence of lesions.