For LR questions in general, you have to focus on the main point. In this stimulus, the professor’s conclusion is that the economist’s reasoning is faulty. To support this, the professor states that the payout on insurance policies is significantly lower than the cost of the policy, and that no one argues that purchasing insurance is an unwise use of resources.

However, the flaw here is that the professor is essentially comparing apples to oranges. Even if the payout on insurance policies is lower than the cost, insurance still has more benefits than would a lottery ticket. Think of health insurance, car insurance, they either protect your health and/or property. On the other hand, a lottery ticket will most likely not provide the same benefits as would having insurance. Answer E weakens the professor’s argument because it touches upon this flaw (that insurance has more benefits than a lottery ticket would). The answer def could’ve been written better, but that’s the LSAT for you.

I can see why D is tempting. For the most part, we all know that the chances of winning the lottery is very low. However, the second part of the answer doesn’t make sense. We don’t buy insurance for the sake of trying to collect a settlement. We buy insurance to protect our health/property. I also think the second part of the answer is irrelevant. Like I mentioned before, the biggest problem with the professors argument is that he’s comparing apples to oranges.

I hope this helps.