Also depends on where you are on final. If you're still 500 feet AGL and have SE climb performance based on conditions, you might consider a Go-Around. That was a scenario I had on my MEI. I'm betting that you're talking about short-final something like 100 AGL and someone pulls out in front of you.

What your DPE wants to know is that you have a limit (at this point I'll continue the landing, and here's why). This question is designed to test judgement and higher-level learning. So think it through and use all the stuff you know to make the best decision you can.