Hola Jan y Braylon

"Pasarlo bien" is a set expression meaning "to have a good time".

In Spain it's always used with "lo", as it states in the exercise, but, in Latin America they'd say "pasarla bien" instead, actually. We forgot to add an option "Seguro que en su juventud LA pasaron muy bien" - we'll add it as soon as possible.

But so that you know, that lo or la doesn't need to agree with any subject (singular, plural, femimine, masculine), it's invariable as it is part of the expression. 

I hope this clarified it. 

Saludos