When light moving away from an observer its frequency or wavelength changes due to the Doppler effect. In this example, light is emitted from a source moving away (the rocket) at a significant fraction of the speed of light. This causes the light waves to `stretch out` or redshift, resulting in the observer seeing a longer wavelength (lower frequency) of light than the source actually emitted.

Blue light has shorter wavelengths while yellow-orange light has longer wavelengths. Hence, the light appears blue to passengers on the ship (where the source is stationary with respect to them) and yellow-orange to an observer on the earth (from whom the source is receding).

Option 1 - Blue, might seem plausible as it`s the colour seen by the passengers. However, the observer`s viewpoint is different.

Option 2 and 3 - Orange and Yellow, are closer to the correct answer as the colour seen should be a longer wavelength than blue.

Option 4 - Yellow-orange, is correct as it`s a blend of two colours that have longer wavelengths than blue, rightly suggesting a phenomenon of redshift.