I think a couple of the responses about prop efficiency are relating a little bit to 'jet thinking' - i.e. mass airflow. Remember a prop blade is just like a wing. It produces lift by increasing AOA onto the airflow. As you accelerate, the angle of incidence of the air onto the prop 'disc' increases. In order to maintain the thrust, the blades must coarsen to maintain the same AOA. As this happens, the lift and drag vectors off each blade tilt. The tilting of the lift vector reduces the forward component, and you need to use a percentage of your torque simply to fight the lift your own prop blades are making. There is now also a component of the drag off each blade directly adding to the aircraft's total drag. Use a digital camera to see how coarse a prop blade is when at high alititude (with both high IAS and TAS). This is why increasing TAS and IAS are both equally bad for a prop. I would suggest that the most correct answer is B (TAS) Increasing TAS is bad for a prop, but invisible to a jet (I think - can you tell I've done some prop time?), whereas increasing IAS is good for a jet (ramrise), but also bad for a prop. Therefore the contrast is greater for increasing IAS, and the most (but not only) correct answer. Standing by to be smashed by the aero eng experts here.
Prop tip speed is generally more of an issue with regards to maximum airspeed for the aircraft, rather than being an issue for engine power.