I've used italics and /'s to show the choices for this question.
In most <em>/American homes, family time is replaced with TV time.
/</em>
<em>/In most American homes, family time is replaced with TV time.
/</em>
In most American homes, family time <em>/is replaced with TV time./</em>
I believe the answer to be
<em>/In most American homes, family time is replaced with TV time.
/</em>