All three options are correct. As you might know, many dogs existent today aren't actually natural breeds, and that's why the question mentions "selective breeding" which you might also know as "genetic engineering".
We also noticed, that "captivation wolves" were actually very useful to us, and that's why we created what we now know as dogs. We started breeding cuter, smaller, bigger, smaller, more or less tempered dogs; whichever was most useful to us.
Hope it helped,
BioTeacher101