Step 1: Formula for capillary rise.
The upward force due to surface tension in a capillary tube is given by:
\[
F_{\text{surface tension}} = 2 \pi r \gamma
\]
where \( r \) is the radius of the capillary and \( \gamma \) is the surface tension.
The downward force due to the weight of the water column is:
\[
F_{\text{weight}} = \rho g A h
\]
where \( \rho \) is the density of water, \( g \) is the acceleration due to gravity, \( A = \pi r^2 \) is the cross-sectional area, and \( h \) is the height of the water column.
Step 2: Equating forces.
At equilibrium, the forces balance, so:
\[
2 \pi r \gamma = \rho g \pi r^2 h
\]
Simplifying:
\[
h = \frac{2 \gamma}{\rho g r}
\]
Using \( \gamma = 7 \times 10^{-2} \, \text{N/m} \), \( \rho = 10^3 \, \text{kg/m}^3 \), and \( g = 10 \, \text{m/s}^2 \), we can solve for \( r \). The given upward force is \( 10^5 \) dyne, which is \( 10^2 \) N, so we calculate the inner circumference of the capillary as \( 1.5 \, \text{cm} \).
Step 3: Conclusion.
Thus, the inner circumference of the capillary is 1.5 cm, which corresponds to option (A).