Yeah, it's an estimation/reasoning question more than anything. They're supposed to see which answer is most reasonable.
it's not 40 because 40 is the same number as in the small square. 150 is a little less than 4 times that, and definitely more than 4 of those squares would fit in the larger area. 1000 would be 25 times that, and it seems fairly clear that 25 of those squares WOULDN'T fit inside the larger area. So 650 is the only possible answer, really.
I know you weren't asking what the answer was; I'm just telling you the thought process the test maker wanted students to use.
I actually hate questions like this on standardized tests. There is a place for reasoning questions like this, but I don't think that's it. Just my two cents.
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