Final answer:
The correct answer is b) Modem, which is the device that converts signals from an ISP into a digital form that computers can understand.
Step-by-step explanation:
The hardware component in a Small Office Home Office (SOHO) setup that translates an Internet Service Provider's (ISP) signals into binary digits (1s and 0s) for use by a computer is a modem. The modem serves as the bridge between the digital devices in your home or office and the analog signal provided by the ISP. Other devices such as a router, switch, or firewall, serve different purposes. A router directs traffic between your local network and the internet, a switch connects multiple devices on a local network, and a firewall provides security measures to control traffic.