What does over-exploitation of natural resources by humans refer to?

The correct answer is Option (3) → Use of natural resources beyond need, when ‘need’ turns to ‘greed’

Humans have always depended on nature for food and shelter, and that alone is not a problem. Over-exploitation begins when ‘need’ turns to ‘greed’, and a resource is taken beyond need, faster than it can recover. Steller’s sea cow and the passenger pigeon were lost in this way, and many marine fish populations are over harvested today.

Option (1) Breaking up of large habitats into small fragments by human activities — Incorrect. Breaking up of large habitats into small pieces is habitat fragmentation, part of the first cause of biodiversity loss. It badly affects mammals and birds that need large territories.

Option (2) Dependence of humans on nature for food and shelter — Incorrect. Depending on nature for food and shelter is normal; NCERT says humans have always done so. It becomes over-exploitation only when use goes beyond need.

Option (3) Use of natural resources beyond need, when ‘need’ turns to ‘greed’ — Correct. Taking natural resources beyond need, out of greed, is over-exploitation.

Option (4) Introduction of species into a new area, deliberately or unintentionally — Incorrect. Bringing a species into a new area, deliberately or by accident, describes alien species invasions, a different cause of biodiversity loss.

NCERT Extract:
Loss of Biodiversity – “… (ii) Over-exploitation: Humans have always depended on nature for food and shelter, but when ‘need’ turns to ‘greed’, it leads to over-exploitation of natural resources. Many species extinctions in the last 500 years (Steller’s sea cow, passenger pigeon) were due to overexploitation by humans. Presently many marine fish populations around the world are over harvested, endangering the continued existence of some commercially important species.”