Question

You want to buy a lottery ticket and you have two lotteries to choose from. Assume that all lottery tickets cost $1. Which one is best? Why?

Lottery 1:

Mean amount won: $800,000

Median amount won: $0.01

Mode amount won: $0

Lottery 2:

Mean amount won: $800

Median amount won: $50

Mode amount won: $50

Answer 1

I would choose Lottery 2 since the median and mode are both 50$ which is much larger than that of Lottery 1.

Also, Mode the is maximum occurring element and median is the middle value.

For Lottery 1 these values are 0 and 0.01 indicating that the mean value is high only due to the maximum payout and only 1 person would be getting that payout. Since there is very less chance of me winning the lottery 1, hence I would choose lottery 2 which has better prospects of winning some higher value than 0 and 0.01$