1.) Arachnida is also well known as an Arachnid. All arachnids have 8 legs, thus it is easy to see whether the animal has 8 legs compared to their exoskeleton (Which you cannot see from the outside appearance), size (Arachnids all vary in different sizes), as well as the method of reproduction (for the arachnids have their different ways in mating).
2.)
Lets compare the answer choices first. An insect is not likely to live underwater and hold a hard exoskeleton so that cannot be the answer. An arachnid is most likely to live above land and however do not have a strong exoskeleton. A crustacean is a variety of different organisms from Crabs to Shrimp, a crab has a strong bone structure and lives underwater, this is most likely the answer choice. A sponge lives underwater, however do not have legs nor a skeleton!
