Professor: Economists argue

Answer choices

1. A

   Strengthens, if Anything3% picked this

   Individuals spend, on average, much more on insurance than on

   If we're trying to argue that "insurance makes sense, lotto tickets don't", it certainly doesn't feel superficially helpful to hear "ya spend even more on insurance than lotto". This is a difference, but not a meaningful one. As stated in my example before, the average cost of an insurance policy might be $500 (vs. a $5 lotto ticket), but the average payout of the insurance policy is also much more, $75 vs. $2. All we know is that they are both a "losing bet" in the long run. We aren't told which one has a worse rate of losing money, but we would only care about the ratio of pay-in to pay-out (500/75 vs. 5/2). This answer is only saying that one has a bigger pay-in than the other (but if it also has a bigger average pay-out, it could still be the wiser investment).

   3%
2. B

   Strengthens, if Anything3% picked this

   Insurance companies generally retain a higher proportion of total revenue than do organizations

   This is essentially saying that insurance companies have a higher profit margin than do lotto sponsors. In other words, with insurance companies, they're keeping more of the money and expending less on payouts to their customers. That would make them a bigger losing bet than lotto tickets, so that goes the opposite of our desired direction: "insurance is fine, lotto is dumb".

   3%
3. C

   Strengthens5% picked this

   Taking small financial risks can often greatly increase one's chances of obtaining

   "Small financial risks for the chance of obtaining much larger benefits" sounds a lot like lotto tickets. This answer is saying something good about lotto tickets? No thanks.

   5%
4. D

   Term Shift: grand prize38% picked this

   In general, the odds of winning the grand prize in a lottery are significantly lower than the odds of collecting a settlement

   This is definitely the most tempting answer, because it feels like it points to a salient difference that makes lotto tickets sound worse: you're way less likely to get a payout! Having reached answer choice D without having made any friends along the way, this is definitely an answer I would hold. The problem is, this answer is talking about the grand prize. The professor's argument is about the average payout. If this answer said the odds of winning any prize in lotto are way lower than the odds of getting an insurance settlement, that would be a meaningful difference that would disrupt the professor's analogy and I'd be much more inclined to pick it. But as written, this just establishes that you're less like to win the biggest prize than to get an insurance settlement. It's still possible, in this case, that the odds of winning something meaningful are as good as the odds of getting some insurance settlement, so it doesn't have a particularly strong impact on the argument.

   38%
5. E

   Correct52% picked this

   The protection against loss that insurance provides is more important to one's well-being than is the possibility

   Why this is right

   This gets at a meaningful difference that allows us to argue that insurance is good, lotto is dumb. Insurance is important because it can help you avoid catastrophic economic losses that could ruin your life and hurdle you into bankruptcy. Lotto is a luxury that might give you a more comfortable standard of living, but in almost all cases will just lead to you losing your money. This has a stronger impact on the argument than our other contender, D, because D is too narrowly focused on the grand prize, not lotto payouts in general.

   Skill tested: Weaken · how this choice captures the argument's function is the move to repeat next time.

   52%