They do it in order of html appearance. There is a short help in adsense about multi unit ads and the best placement of them etc. And yes they still drop them if they cant fill the second and third
f1 fan 16 Posting Whiz in Training
f1 fan 16 Posting Whiz in Training
f1 fan 16 Posting Whiz in Training
f1 fan 16 Posting Whiz in Training