What is the expected value of the lottery, Microeconomics

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What is the expected value of the lottery

Problem

A lottery. Consider a lottery with three possible outcomes: $125 will be received with probability 0.2, $100 with probability 0.3, $50 with probability 0.5.

1. What is the expected value of the lottery?

2. What is the maximum amount a risk-neutral person would pay to play the lottery?

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Microeconomics: What is the expected value of the lottery

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Microeconomics: What is the expected value of the lottery

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