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Explanation:

Option 2 is incorrect because the prairie was not a desert in the true sense of the term.
Options 3 and 4 contradict the passage.
The passage mentions, “When they finally reached the western edge of the place we now call Indiana the forest stopped and ahead lay a thousand miles of the great grass prairie. The Europeans were puzzled by this new environment.” The key words here are ‘new environment’. They were not necessarily shocked by the contrast. The new environment consisted of a thousand miles of the grass prairie covered with centuries of tangled and matted grasses that seemed untillable.
Hence, the correct answer is option 1.