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."
Book titles would be the correct answer.
All I know about that book is that it's set in small New England villages, so C would make sense but not 100% sure