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So from my understanding, E is incorrect because it does not really have anything to do with cost overruns. It is just saying that the estimated cost is inflated to make the contractor look like they're giving you a deal. It does not explain why cost overruns are more common in that type than the other type.
Answer choice C is not correct because the passage explicitly states that no empirical research has been studied from actual trials. Answer choice C states that records from judges' decisions were used, which would fall under the category of research from actual trials.
Answer choice E is correct because we do not know if the psychological research was directly concerned with legal proceedings. The passage never gives the reason the psychological research was done, and thus it is not a stretch to assume it was not done for the purpose of legal proceedings. In fact, it is unlikely that these studies were conducted using legal proceedings, as they conclude things about people generally, not just in the courtroom.
After reviewing, A is wrong because the family size in the countries are decreasing, but it doesn't give any indication that they are SMALL. The family size could have been 100 kids and is now 99 kids, which is still a lot. I didn't recognize this at first but still chose E because it MOST supported the hypothesis. It was stronger support than A because it directly showed kids being exposed to germs in infancy.