Consider the Following Game

question 22

Multiple Choice

Consider the following game. You pay me an entry fee of x dollars, then I roll a fair die. If the die shows a number less than 3, I pay you nothing; if the die shows a 3 or 4, I give you back your entry fee of x dollars; if the die shows a 5, I will pay you $1; and if the die shows a 6, I pay you $3. What value of x makes the game fair (in terms of expected value) for both of us?

• A) $2
• B) $4
• C) $1
• D) $0.75
• E) $0.50

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Definitions:

Monroe Doctrine

A United States policy declared in 1823, opposing European colonization in the Americas and stating that any intervention in the politics of the Americas by foreign powers would be seen as a hostile act.

European Powers

Refers to the leading countries in Europe, historically recognized for their global influence and colonial activities.

Latin America

A region in the Western Hemisphere, characterized by countries that speak Romance languages, primarily Spanish and Portuguese.

Free Blacks

African Americans who were not enslaved before the Civil War, enjoying limited rights in America.