1 Tickets to a lottery cost $1. There are two possible prizes: a $10 payoff with probability 1/50, and a $1,000,000 payoff with probability 1/2,000,000. What is the expected monetary value of a lottery ticket? When (if ever) is it rational to buy a ticket? Be precise—show an equation involving utilities. You may assume current wealth of $k and that U(Sk) = 0. You may also assume that U(Sk+10) = 10 × U(Sk+1), but you may not make any assumptions about U(Sk+1,000,000). Sociological studies show that people with lower income buy a disproportionate number of lottery tickets. Do you think this is because they are worse decision makers or because they have a different utility function? Consider the value of contemplating the possibility of winning the lottery versus the value of contemplating becoming an action hero while watching an adventure movie.