Your understanding is correct, and i suppose the explanation makes sense. However, the question doesn't prompt you to consider it from the earths F.O.R. so this shit is fucked. Where'd you get this Q
re: HSC Physics Marathon Archive
Have a go at this one
In which case is an astronaut closest to "true" weightlessness
A)Floating around in a cabin of a spaceship orbiting earth
B)Walking on the moon
C)Falling back to Earth during re-entry in a space shuttle
D)Halfway between the moon & Earth...