Eddy currents are produced when

CONCEPT:

Eddy current:

• When a metal moves in a magnetic field or when the magnetic field through a stationary metal is altered, an induced current is produced in the metal.
  • This induced current flows in the metal in the form of closed loops resembling ‘eddies’ or whirlpool.
  • Hence this current is called eddy current.
  • The direction of the eddy current is given by Lenz’s law.

EXPLANATION:

• When a changing magnetic flux is applied to a metal piece of conducting material then circulating currents is called eddy currents are induced in the material. Therefore option is 1 correct.
• When a metal is kept in a steady magnetic field, then the number of magnetic fields lines passing through the metal surface does not change and, hence no eddy current is induced in it. 
• When a circular coil is placed in a magnetic field and it is not moving in the magnetic field, therefore the number of magnetic field lines passing through the circular coil does not change and, hence no eddy current is induced in it.