This question came up in my driver license test (in Japan).
I found this question hard to answer because not allowing someone to overtake you may cause an accident (after all, you may be mistaken about the available space). However, if indeed there is no enough space, it may cause an accident.
I was unable to find the answer available in English here, so I'm guessing other countries may have similar rules.
The correct answer for this question will be a quote (and a link) to an official (or credible) source about this issue here in Japan or alternatively in any other country.