Answer: 1/2.
Explanation:
First, note that since the previous drops have already happened, their result do not modify the occurrence of future results when the toast is dropped again.
In oder to have a total of three time landing butter side up, exactly, there are two possibilities:
Since there are two ways of totaling side up 3 times, you have to sum both chances.
1) Next drop butter side up and second drop butter side down:
1/2 × 1/2 = 1/4
2) Next drop butter side down and second one butter side up:
1/2 × 1/2 = 1/4
3) Add both probabilities: 1/4 + 1/4 = 1/2
And that is the answer: 1/2