I came across this wording in my review of the FAA Part 107 course:

within the lateral boundaries of the surface area of Class E airspace designated for an airport.
it refers to ATC clearance required area.  Its the magenta ring around some airsports.  Class E airspace with a floor of 700' AGL.  Question is if you are flying at 400' AGL, is clearance required?   

Of course not.  

Some of the overly condensed terminology they like to throw out there gets confusing.   I think its done on purpose.

I'm assuming your assessment of the question is correct and that the "lateral boundaries" are (faded) magenta lines defining the 700 foot floor, as you posted.  However, the question says "surface area" so it sounds like it's referring to the dashed magenta lines, not the faded magenta lines.  I'm not sure where you got your info that the question refers to the 700 foot floor since the words "surface area of Class E airspace" is within the question.  Maybe you didn't post part of the question.  Or maybe you may have made a bad assumption.  If that's all there is to the question, I agree with you that it's badly worded.  It would be so much simpler if they would refer to the area as within a dashed magenta line or a faded magenta line.  

I'm not an expert and I don't have and never studied for and I'm not really interested in a 107, but I do like to study and understand the sectional charts.  My understanding is, Class E is all over the country from coast to coast but it's over our heads so it usually doesn't affect us.  There are at least a couple exceptions.  1)  You are within a dashed magenta area.  That means Class E drops all the way down to the surface within that dashed magenta area.  It's kind of rare but it's because an airport is not big enough to be Class B, C, or D and yet is busy and needs controlled airspace down low for operational safety.  2)  You decide you need to fly 400 feet over a tall tower which is within the rules of Part 107 but would potentially take you above 700 feet depending on the tower.  In that case, you should check the charts because if you're in a Class E Transitional area as indicated by the faded magenta line surrounding the area, the Class E starts at 700 feet rather than the more common 1200 feet or 14500.  So you'd have to stay under 700 feet or get FAA/tower approval.  

In this case, you didn't have to look at a sectional because the answer is within the question.  But the question by itself seems to be referring to the dashed line, but you've already said it was referring to the (faded) magenta with the 700 foot floor.  Maybe there's a part of the question you didn't post?  Or maybe you made a bad assumption.

Good luck!

Hi Mark,  Thanks for taking the time to dissect that for me.  I fly in an area with the faded magenta line for MSP (Class E Transitional area)  and I do not require clearance.  I did get the two areas confused.  The dashed magenta line (Class E to the surface) and the faded magenta line (in this case 700'floor).  I believe in some cases they use the dashed magenta areas as IFR extensions for some airports with partial tower hours.    I only referenced part of the question but when they use that word "surface", it threw me off.   My assumption was incorrect and the question was referring the dashed magenta line.  Great explanation....thanks

I'm a retired 32 year ATC and the rules have changed quickly in the 2 years I've been retired but this is what I remember. The Class E Surface area is associated with a high density small uncontrolled (no ATC tower) airport, normally with an instrument approach.  It is different than Class E airspace. The added term 'surface' indicates that it indeed goes to the surface for the arriving and departing aircraft safety. When I was in Knoxville, TN,  I had a CoA waiver from the FAA to operate in Class E Surface airspace associated with KDKX and notified the controlling radar facility (at TYS) of my intent to fly. They simply acknowledged my intent and neither approved or denied verbally. I had to keep that CoA certificate along with my Part 107 license with me in the event of any curious officer wondering why I was flying. My recent talks with fellow controllers still working indicate that there is some sort of variance allowed in proximity to buildings and antenna. It's changing fast!  Have fun y'all. Fly safe.