I don't understand why will only the 12 ohms lamps turn on when the switch is in position 2. shouldn't the current flow like this (like I highlighted in the picture)?

Current only flows from a higher voltage to a lower voltage. What you highlighted cannot happen because current cannot flow towards a lamp unless there is a lower voltage on the other side of it. The current will continue to the lower voltage of the battery instead.

The best answer is (a) which is universal law is in effect at all times. it is constantly at play in everything we do and governs our lives. it is also important to note that universal law applies to not only everything on earth, but everything in the universe as well, which is another reason why it is in effect at all times.