Answer
During this rotation, the fraction of the initial light intensity passed by the sheet decreases.
Work Step by Step
If the light is initially polarized parallel to the y axis, all of the light will be transmitted when the polarizing sheet is parallel to the y axis.
We can write an expression for the intensity of the light that is transmitted:
$I = I_0~cos^2~\theta$
Initially, $\theta = 0^{\circ}$, so $I=I_0$
As the polarizing sheet is rotated, the angle increases from $0^{\circ}$ to $40^{\circ}$
$I$ will decrease during this rotation.
During this rotation, the fraction of the initial light intensity passed by the sheet decreases.
