What does this question test?

I noticed this question when looking at questions that many of my students got wrong on a practice test that I gave them. I'm not going to tell you what I think; I'm curious what YOU think. This is a real question from the multiple choice portion of the ILS Exam from 6/04. The test has been made public and can be found here.

17. Beaver dams can cause floods.

This statement shows how
(1) animal growth is affected by environmental conditions.
(2) animal behavior may affect the environment.
(3) an animal's health depends on its environment.
(4) an animal's development depends on its environment.

Please note, I am NOT asking you what the answer is. I'm asking you what the question tests, or what is the difference between a student who gets this right and a student who gets it wrong.