(i) 30 m/s.
Given, n = 800 Hz, n' = 870 Hz and v = 343 m/s. The ambulance is a source moving towards a stationary observer, so
$\text n' = \text n\left[\frac{\text v}{\text v - \text v_\text s}\right]$
Substituting the values,
$870 = 800 \times \left[\frac{343}{343 - \text v_\text s}\right]$
$343 - \text v_\text s = \frac{343 \times 800}{870}$
$$\begin{aligned}\text v_\text s = 343 - \frac{343 \times 800}{870} = \frac{343}{870}(870 - 800) \\[1em] = \frac{343 \times 70}{870} = 27.6\ \text{m s}^{-1}\end{aligned}$$
The value 27.6 m s-1 is closest to 30 m/s.
(ii) The speed of the ambulance remains constant.
It is stated in the assumptions of the passage that the speed of the ambulance is constant. The drop in the observed frequency after the ambulance passes by is therefore not caused by any change in its speed — it is entirely due to the Doppler effect, the source now receding from the observer instead of approaching.
(iii) The sound waves get compressed as the ambulance approaches and stretched as it moves away.
As the source advances towards the observer, each successive wavefront is emitted from a point nearer to the observer, so the wavefronts crowd together and the observed wavelength is shortened. Since v = nλ and the speed of sound is unchanged, a shorter wavelength means a higher frequency. When the source recedes, the wavefronts are stretched apart, the wavelength is lengthened and the observed frequency is lower.
(iv) The frequency would increase further.
If the pedestrian also starts walking towards the approaching ambulance, then both the source and the observer are moving towards each other, and the general Doppler formula applies,
$\text n' = \text n\left[\frac{\text v + \text v_\text o}{\text v - \text v_\text s}\right]$
The numerator increases while the denominator stays the same, so the relative speed between the source and the observer increases and the perceived frequency rises still further.
(v) It is the change in pitch (frequency) due to the relative motion between the source and the observer.
The Doppler effect is the change in the frequency, that is, the pitch, of a wave in relation to an observer moving relative to the source of the wave. It has nothing to do with loudness, and it does not require the source to travel faster than sound — that condition produces a sonic boom, which is a separate phenomenon.