Looks like A, as Eileen explains a distinction for example given by James


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(A) draw a distinction
--distinction = contrast( because James in his own house do dot offer public service) with which Eileen counters James argument.

(B) offer a definition
--no where she is providing a definition .
--Out

(C) establish an analogy
--What James does
--Out

(D) derive a contradiction from it
--No Contradiction was present in James argument , therefore it cannot be derived
--Out

(E) question its motivation
-- No motivation as well.
--Out

A for me.

James seems to believe that airlines should have similar rights to people. He concludes that since he can do as he pleases in his own house, the government ignores the airlines' rights when it imposes smoking policies on passenger airlines.

Eileen correctly points out that James analogy is false. Since his house is for his personal use, but airlines are for public use, the airlines shouldn't have the same control over aircraft as James has over his house. She points out that the passenger's health should come first. She is implying that James might have a right to risk his own health in his own house, but a public airline does not have the right to risk its passengers in that way.

Answer choice (A): This is the correct answer choice. Eileen points out that James' analogy is false, because there is a difference between the situations. A difference is a distinction.

Answer choice (B) Eileen does not really define anything, so this choice is incorrect. Even if you were willing to assume that her elucidation of what a passenger airline does is somewhat of a definition, you should realize that it is the contrast that attacks James' argument, not simply the existence of a definition, so this choice is not as good as answer choice (A).

Answer choice (C) Eileen does not establish an analogy; she attacks James' analogy.

Answer choice (D) Eileen might contradict James' conclusion, but she does not point out an internal contradiction, so this response is wrong. This type of answer choice is correctly associated with a self-contradictory stimulus or one that produces logically absurd conclusions. In that case, the second speaker will actually use the first speaker's logic to create a contradiction.

Answer choice (E) Eileen never discusses James' motivation, so this choice is incorrect. Remember, even though you are supposed to personalize and be aggressive, you have to be careful as well. The LSAT test writers have included this response because we know that when people such as James make such arguments, it is generally not because such people care about anyone's rights, but rather because such people want to engage in their selected behaviour. In other words, James cares neither for anyone else's rights nor well-being, but only his own ability to indulge in smoking. However, James does not even claim to allow smoking in his house, and Eileen does not discuss his motivation. Furthermore, his questionable motivation does not make him wrong-- remember, attacks on motive are character attacks when they do not respond to the argument.

I took time to pick between A and D - 'distinction' vs 'contradiction'.
Distinction means the difference between similar things - she draws a distinction between
=> 'his house as a private property where he can do whatever he wants to' and
=> 'his house as a private property but passenger airline as a public property where public health comes first'.
She agrees that it is his house but she also gives a different opinion with reference to the house.
This makes sense thus we will hold on to A.

Contradiction means ideas opposing one another - Is she contradicting anything he said ?
Not really. She rather agrees with what he said regarding his house, but she has a different opinion regarding airlines.
Thus I eliminated D.

Happy to receive kudos if you also faced the same challenge - 'distinction' vs 'contradiction'.