Let's break down this argument:
If we were to believe that people's intentions are more bad than good, then we'd stop trusting each other, and society would fall apart without trust. Therefore, it must be true that people's intentions are not more bad than good.
Do you see any gaps here? The first red flag should be that the premise is talking about what would happen if people believed something, while the conclusion is talking about whether that belief is true. It's kind of like if I said, "If children believed they were inevitably going to die, they would be completely depressed all turn into criminals. Therefore, death must not be inevitable."
Do you see my point? There's a big assumption here, namely that if believing something would have negative consequences, then that belief itself must be false.
(A) is correct because it identifies this assumption, but in a wacky way. The argument assumes that if a belief has negative consequences, it must be false. In logical terms it would look like this:
Negative consequences ---> False
And the contrapositive would be
True ---> not negative consequences
In other words, the argument assumes that if a belief is true, it doesn't have negative consequences. So it ignores the possibility that a belief could be true and have negative consequences.
This is also a good example of how working from wrong to right can help us with difficult CR problems:
(B) is out of scope. Where does the argument talk about two claims that cannot both be true?
(C) is out of scope. The argument never mentions people who believe the claim, let alone questions their motives!
(D) is out of scope. Two possible outcomes?
(E) is -- drum roll -- out of scope. The argument doesn't talk about any particular groups of individuals; it talks about people, in general, the whole time.