Question related to the interference seen at the spectrum analyzer's receiver
Neither (a) nor (b) are correct as far as I see it.

It's highly likely that the question is trying to get you to realize that the local oscillator is set at 329.3 MHz (or 10.7 MHz above 318.6 MHz) and, will be precisely 10.7 MHz below an interfering signal at 340 MHz i.e. both 318.6 MHz and 340 MHz will be down-converted to a signal at 10.7 MHz and you will not know whether you are measuring 318.6 MHz or 340 MHz.

This is why decent spectrum analyzers uses several tiers of frequency-decreasing IF stages. 

For instance, if your spectrum analyzer was designed for measuring input signals from DC to 100 MHz, the first local oscillator frequency might be set at 250 MHz. This results in an up-conversion of wanted signals into the range 250 MHz to 350 MHz. 

The impact of this is that a potential interfering signal of (say) 150 MHz would produce a difference frequency of 100 MHz and would be outside the wanted up-conversion range. In fact, only when an interferer of 500 MHz was present would the difference frequency be at the edge of the desired range (250 MHz).

So, the spectrum analyzer would apply a reasonable low pass filter on the signals it measures such that anything above 100 MHz would be attenuated and, by the time 500 MHz is reached, the attenuation would be over 100 dB typically. This could be an 8th order filter having an attenuation of 48 dB/octave; 200 MHz would be attenuated by 48 dB; 400 MHz would be attenuated by 96 dB etc..