I believe the correct answer is the third one...
The correct answer is the second option. When the muskrat dove into the sea, we can infer that he reached the bottom, since his hand held a "tiny speck of earth" upon resurfacing. However, the muskrat likely did not have enough time or oxygen to swim all the way back up, and so instead held on to the dirt and drowned, allowing the body to float back to the surface. In this way, he sacrificed his own life, knowing that the dirt he procured would "make the earth grow."
What life was like under the dictatorship
Mice is plural....plural is more than one