The question seems like a puzzle which appears very simple, but maybe not so simple ,or it just pretends to be complex... I'll try my best answering it as I understand it. I apologize if I misunderstood some obvious hints.
I haven't worked a lot with PostgreSQL, but from what I remember it handles transactions very similar to Oracle, so there is no real
Read uncommitted - you get
Read committed. The question doesn't sound very clear to me because isolation levels matter when you have simultaneous queries, and no other queries mentioned, so don't blame me too much if I miss something.
If we put remaining isolation levels in the order "Read committed"->"Repeatable read"->"Serializable", the overhead grows accordingly. So we need to check them in the same order, and once we are satisfied, there is no need to check remaining levels (they will be fine, but with more overhead). As far as I understand,
UPDATE Courses set dept = 'New department' coursed_id = ’CPSC1350’ does the required work. From Postgre documentation that describes Read committed isolation level,
UPDATE, DELETE, SELECT FOR UPDATE, and SELECT FOR SHARE commands behave the same as SELECT in terms of searching for target rows: they will only find target rows that were committed as of the command start time. However, such a target row might have already been updated (or deleted or locked) by another concurrent transaction by the time it is found. In this case, the would-be updater will wait for the first updating transaction to commit or roll back (if it is still in progress). If the first updater rolls back, then its effects are negated and the second updater can proceed with updating the originally found row. If the first updater commits, the second updater will ignore the row if the first updater deleted it, otherwise it will attempt to apply its operation to the updated version of the row. The search condition of the command (the WHERE clause) is re-evaluated to see if the updated version of the row still matches the search condition. If so, the second updater proceeds with its operation using the updated version of the row.
I'd say I'm satisfied with such behaviour in this case, so I'll go with
READ COMMITTED unless there are other restrictions not mentioned in the question.