Option 1 suggests that during free fall, the object`s potential energy increases and its kinetic energy decreases. This is incorrect because during free fall, the object loses potential energy as it falls towards the ground. As the object falls, the potential energy is converted into kinetic energy. Therefore, the object`s potential energy decreases and its kinetic energy increases. Option 1 is not the correct answer.

Option 2 correctly explains that during free fall, the object`s potential energy decreases and its kinetic energy increases. As the object falls, it loses potential energy due to the decrease in its height. At the same time, its speed increases, resulting in an increase in kinetic energy. So, option 2 is the correct answer.

Option 3 implies that both potential energy and kinetic energy increase during free fall. However, as explained above, the object`s potential energy actually decreases during free fall. Option 3 is not the correct answer.

Option 4 suggests that both potential energy and kinetic energy decrease during free fall. This is incorrect because the object`s potential energy decreases while its kinetic energy increases. Therefore, option 4 is not the correct answer.