I am having problems finding the correct way to solve this problem. I don't know the formula or even how to set it up.
"Sam brought one of 250 tickets selling for $2 in a game with a grand prize of $400. Was $2 a fair price to pay for a ticket to play this game. (probability)
expected winning = (1/250)(400) = 1.6
So you would be paying $2.00 to win back $1.60
If this is "fair" depends on what the purpose of the lottery is. If it was some kind of charity event, I would call it fair.