It's not possible to solve this answer with the typo in (2) since it could be ab >0 or ab < 0 or ab = 0, each of which has implications on the problem.
But to answer your question, this is how I would approach this problem. Since the absolute value function is simple (e.g. |a| vs |3a+b|), I would categorize the variables into sets of possible values:
a --> {+, -, 0}
b --> {+, -, 0}
|a| --> {+, 0}
|b| --> {+, 0}
*remember your 0 properties and the stem did not state a and b are non-zero
a * |b| < a – b?
{+, -, 0} * {+, 0} < {+, -, 0} - {+, -, 0}
(1) a < 0
so a is not 0 and is negative, then the equation above looks like this:
a * |b| < a – b?
{-} * {+, 0} < {-} - {+, -, 0}
so the left hand side must be negative or 0
a * |b| < a – b?
{-} < {-} - {+, -} ?
0 < {-} - {0} ?
so now you can plug in different numbers knowing that you can try to find values that makes that last version of the equation sometimes true and sometimes false so that you can eliminate (1) as an answer choice, but you must remember that |a| > |b| as given by the stem.
let a = -2 then b = { -1, 0,1 } since |-2| = 2 and 2 > |b|:
a * |b| < a – b?
{-} < {-} - {-} ? becomes (-2)(1) < -2 - (-1) True
{-} < {-} - {+} ? becomes (-2)(1) < -2 - 1 False
0 < {-} - {0} ? becomes (-2)(0) < -2 - 0 False
So (1) is not sufficient.
You don't necessarily need to write out the formula with the different values, but I did it here to illustrate my point. You can just use the information given to constraint the values, then plug in; I wouldn't actually write out the formula so many times on a CAT because it's too time consuming. My suggestion is to take a methodical approach like the one above while practicing to get used to it.