Professor: Economists argue that buying lottery tickets is an unwise use of resources, because the average payoff for...

Will on May 5 at 10:34PM

Explanation

Can someone please clarify why D is incorrect and E is correct?

3 Replies

Ravi on May 6 at 08:13PM

@wills,

Happy to help. Let's take a look at (D) and (E).

The question says, "Which one of the following, if true, most weakens
the professor's argument?"

(D) says, "In general, the odds of winning the grand prize in a
lottery are significantly lower than the odds of collecting a
settlement from a typical insurance policy."

(D) does pick up on the difference between lottery tickets and
insurance policies. However, the argument in the stimulus discusses
the average return, which takes into consideration the odds of
receiving a payout. Because this is already part of the argument,
there is no way that it can have an effect on it, so (D) is out.

(E) says, "The protection against loss that insurance provides is more
important to one's well-being than is the possibility of a windfall
gain."

With (E), insurance policies would provide another benefit in addition
to a payout (if something were to go wrong). This doesn't happen with
lottery tickets. if (E) is true, this strongly calls into question the
professor's counterexample, which weakens his argument, making (E) the
correct answer choice.

Does this make sense? Let us know if you have any other questions!

Serra on June 26 at 07:59PM

Great explanation, thank you!

Ravi on June 27 at 10:00PM

@msaber, happy to see it helped!