Lecture 2_Part1

Lecture 2_Part1 - Characteristics of Probability...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
SUNY at Albany - Department of Economics Eco 320 • Economic Statistics Characteristics of Probability Distributions I Expected Values
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
0. Question to be Answered A. If you gamble, you care about how often you will win. The probability of winning tells you what proportion of a large number of bets will be winners. You care even more about how much you will win, because winning a lot is better than winning a little. B. Which is the better gamble: an enormous jackpot with extremely small odds or a modest jackpot with more reasonable odds? C. In another context, which is the better investment: an unusually high return with very small odds or a modest return with moderate odds? SUNY at Albany - Department of Economics Eco 320 • Economic Statistics
Background image of page 2
00. Lotteries raise public revenue without raising taxes. A. Government-run gambling reappeared in 1964, when New Hampshire caused a furor by introducing a lottery to raise public revenue without raising taxes. B. Forty-two states and all Canadian provinces now sponsor lotteries. C. Some form of legal gambling is allowed in 48 or the 50 states. D. Over half of all adult Americans have gambled legally. They spend more betting than on spectator sports, video games, theme parks, and movie tickets combined. SUNY at Albany - Department of Economics Eco 320 • Economic Statistics
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
[Example] The Tri-State Daily Numbers A. The “Straight” from the Pick 3 game of the Tri -State Daily Numbers offered by New Hampshire, Maine, and Vermont: You pay $0.50 and choose a three-digit number. The state chooses a three-digit winning number at random and pays you $250 if your number is chosen. What is your probability of winning? SUNY at Albany - Department of Economics Eco 320 • Economic Statistics
Background image of page 4
A. The “Straight” from the Pick 3 game of the Tri -State Daily Numbers offered by New Hampshire, Maine, and Vermont: You pay $0.50 and choose a three-digit number. The state chooses a three-digit winning number at random and pays you $250 if your number is chosen. What is your probability of winning? Because there are 1000 three-digit numbers, you have probability 1/1000 of winning. Here is the probability distribution for your winnings: B. What are your average winnings? SUNY at Albany - Department of Economics
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/08/2012 for the course ECON 320 taught by Professor Chan during the Spring '11 term at SUNY Albany.

Page1 / 25

Lecture 2_Part1 - Characteristics of Probability...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online