I think the correct answer would be the first option. As the hiker reaches the top of the mountain, the plastic bag would, most likely, expand. Before starting, the plastic bag would have a certain amount of gas particles inside. As the you hike, the pressure would decrease causing for the gas molecules to reestablish equilibrium thus pushing the bag outwards. In other words, expanding the bag. Also, base from the ideal gas equation, PV = nRT, at constant temperature and number of moles, pressure and volume are inversely related. Thus, as the pressure decreases, the volume of the system would increase accordingly.