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Caution: I am not a GMAT expert.

This question becomes very easy to solve if you use a Venn Diagram.

Circle A: Children who play with fire
Circle B: Children who don't play with fire
Circle C: Children who believe that there will be no consequences
Circle D: Children who believe that there will be consequences

As you can see, A&B are mutually exclusive and exhaustive. C&D are also mutually exclusive (may or may not be exhaustive, but that won't affect our question here).

As given in the prompt, A lies inside circle C.
Therefore, A cannot intersect with D; it means if a child knows there will be consequences, he/she will not play with fire.
That's it. There we have our answer.

Do let me know if you found it helpful!
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