Final answer:
The correct use of the participle phrase 'laughing at his jokes' is in option B, where it is used to describe the subject 'she' who is laughing at his jokes while watching the shiny, red car pull in.
Step-by-step explanation:
The correct use of the participle phrase 'laughing at his jokes' is option B. In this sentence, 'Laughing at his jokes, she watched the shiny, red car pull in.' The participle phrase is used to describe the subject 'she' and shows the action of laughing at his jokes happening at the same time as watching the shiny, red car pull in.
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