TASK DEFINITION: You are given a background paragraph that describes one or more causal or qualitative relationships such as a relationship in economics or a scientific law and a story that makes use of the concepts or the relationship described in the provided paragraph. You are also given a question about the story that requires an understanding of the relationship described in the background paragraph and the story. You need to come up with an answer to the given question; the answer will be a span from either the question or the story. In order to correctly answer the given question, you need to understand the relationship mentioned in the background paragraph and should be able to use it to understand that in the story. Your answer can not consist of any word that is not mentioned in any of these: the background paragraph, the story, or the question. You can directly copy and paste a span from the story or the question while answering the given question.
PROBLEM: Background Paragraph: The trade-off theory of capital structure is the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger[1] who considered a balance between the dead-weight costs of bankruptcy and the tax saving benefits of debt. Often agency costs are also included in the balance. This theory is often set up as a competitor theory to the pecking order theory of capital structure. A review of the literature is provided by Frank and Goyal.[2]

An important purpose of the theory is to explain the fact that corporations usually are financed partly with debt and partly with equity. It states that there is an advantage to financing with debt, the tax benefits of debt and there is a cost of financing with debt, the costs of financial distress including bankruptcy costs of debt and non-bankruptcy costs (e.g. staff leaving, suppliers demanding disadvantageous payment terms, bondholder/stockholder infighting, etc.). The marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing. 
Story: Company X stopped taking on more debt, and decided to file for bankruptcy, while company Y, kept benefiting from the tax benefits of debt, having a lower debt level. 
Question: Which company discharged more debt, company X or company Y?

SOLUTION: company X.

PROBLEM: Background Paragraph: Protozoa generally feed by engulfing and digesting other organisms. As consumers, they have various roles in food chains and webs. Some are predators. They prey upon other single-celled organisms, such as bacteria. In fact, protozoa predators keep many bacterial populations in check. Other protozoa are herbivores. They graze on algae. Still others are decomposers. They consume dead organic matter. There are also parasitic protozoa that live in or on living hosts. For example, the protozoan that causes malaria lives inside a human host. For their part, protozoa are important food sources for many larger organisms, including insects and worms. 
Story: An astronaut has just landed on a new martian planet and encounters two different protozoa. The first protozoa he finds, protozoa X, is eating algae that is floating on top of water. The second protozoa, protozoa Y, is found eating bacteria. Upon further study, it is found that these are the only foods these two specific protozoa eat. 
Question: Which protozoa is a herbivore?

SOLUTION: protozoa X.

PROBLEM: Background Paragraph: Old age begins in the mid-60s and lasts until the end of life. Most people over 65 have retired from work, freeing up their time for hobbies, grandchildren, and other interests. Stamina, strength, reflex time, and the senses all decline during old age, and the number of brain cells decreases as well. The immune system becomes less efficient, increasing the risk of serious illnesses such as cancer and pneumonia. Diseases such as Alzheimer’s disease that cause loss of mental function also become more common. 
Story: Two groups of people participated in a geriatrics study. Group D had people over 65 years old, while group Y had people in their 40's in its composition. 
Question: Which group had people at greater risk of developing Alzheimer’s disease?

SOLUTION:
Group D.