The question contains a category error: three entries are islands, one is a city. Direct population comparison requires matching geographic types.
Among cities: Budapest (1.75M) vs. Iqaluit (7,700) vs. Denpasar, Bali (725K) vs. Borneo's major cities (Banjarmasin 700K, Pontianak 650K, Kuching 600K).
Among islands: Borneo (23M) > Bali (4.3M) > Baffin (13K).
If forced to choose from the literal list treating all as "places," Baffin Island has the smallest total population (~13,000). But correctly framed: Budapest is the only city listed, making it the sole valid answer for "city with lowest population" among the options—though it's actually the largest city among the implied urban centers.
The exercise highlights why geographic precision matters: islands contain cities; cities anchor islands. Comparing them directly conflates scale and administrative definition.