The correct answer is option 2: unstable equilibrium.

When a ball is balanced on a vertical rod, it is in a state of unstable equilibrium. This means that any small disturbance or perturbation to the system will cause the ball to move away from its balanced position and fall.

In unstable equilibrium, the center of gravity of the object is higher than the support point or base. This creates a condition where the object is inherently unstable and prone to falling or toppling over. In the case of a ball on a vertical rod, the center of gravity is located above the point of contact with the rod.

If the ball is slightly nudged or affected by external forces, it will start to sway and eventually fall due to the force of gravity. The unstable equilibrium of the ball on the vertical rod makes it a good example of a system that is easily disturbed and has a high potential for change when subjected to external influences.