Correct answer
The car, because it is travelling uphill, except when it can reach a passing place first.
On a narrow steep gradient, the uphill vehicle has precedence unless it can reach a designated passing place first. Here the car is climbing. The rule considers a gradient of at least 7% steep, not only one above 7%. If the gradient or proximity of a passing place is uncertain, the prescribed precedence order applies; do not automatically replace the rule with whichever vehicle would reverse farther.
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The car, because it is travelling uphill, except when it can reach a passing place first.
Whichever vehicle has to reverse the greater distance.
The lorry, by order of priority.
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