The statement which is true about a short story is that it uses narrative techniques (e.g. plot, characters, setting, and conflict). A short story is similar to any other story - the only difference is that it is much shorter in length. It may use logical explanation, or it may not - it really depends on the story. The second option (the one about dramatic elements) refers to plays, not short stories. It doesn't use nonfiction, because short stories are fiction.