Probability: Expected Value and Decision Analysis

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1- In a certain state lottery, a lottery ticket cost $8. In terms of the decision to purchase or not to purchase a lottery ticket, suppose that the following payoff table applies:

                                State of nature
Decision alternative           Wins s1        Lose s2
Purchase lottery ticket d1           290,000             -8
Do not purchase lottery ticket d2        0              0

1. A realistic estimate of the chances of winning are 1 in 290,000. Use the expected value  approach  to recommend a decision.