A boat carrying steel balls is floating on the surface of water in a tank. If the balls are thrown into the tank one by one , how will it affect the level of water?

When the balls are floating on the boat, they displace their own MASS of water (Archimedes Principle), but when they are thrown into the tank, they displace their own VOLUME of water. Since the steel is denser than the water, less water is displaced when the ball is only displacing its volume, instead of its (greater) mass. Hence the water level falls.