In this case, the original figure is the large triangle and the dilated figure is the smaller dashed triangle. As early as this stage, we can already set that the dilation is a reduction. We can now eliminate the last choice which says enlargement.
One way to know how much did the figure reduce is by finding the areas of the bigger and smaller triangle. The area of a triangle is equal to half of the product of the length of its base and its height.
Area of larger triangle= 0.5(6 units)(4 units) = 12 square units
Area of smaller triangle = 0.5(3 units)(2 units) = 3 square units.
The ratio of the areas would be 3/12 = 1/4. Therefore, the answer is the first choice.