Qusetion: We learned in this chapter that one idea researchers have tested was that when forced to make a decision, people choose the alternative that yields the highest expected value.
a. If that were the case, explain which of the following two choices people would make:
Choice A: Accept a gift of $10.
Choice B: Take a gamble with probability 11000 of winning $9000 and 9991000 of winning nothing.
b. Explain how the situation in part a resembles the choices people have when they decide whether to buy lottery tickets.