Answer: (C) Naturalistic Observation
Step-by-step explanation:
The Naturalistic observation is one of the concept that is typically used by the various types of social scientist and also the psychologist for the research purpose as this type of observation technique involve the study the interested topic which is basically depends on the individuals own interest.
According to the given question, Theo and his team are the graduate students and he interested on the topic gender difference so Theo and his research group members observing the preschoolers during the free time and note the difference between girls and boys.
Therefore, they are using the Naturalistic observation method so option (C) is correct answer.