Step 1: Note the process.
A monoatomic gas is suddenly (adiabatically) squeezed to one eighth of its volume. We want the ratio of final pressure to initial pressure.
Step 2: Recall the adiabatic law.
For an adiabatic change, $PV^\gamma=\text{constant}$, where $\gamma$ is the ratio of specific heats.
Step 3: Use the right $\gamma$.
For a monoatomic gas, $\gamma=\frac{5}{3}$.
Step 4: Write the two-state relation.
\[ P_1V_1^\gamma=P_2V_2^\gamma, \] with $V_2=\frac{V_1}{8}$.
Step 5: Rearrange for the pressure ratio.
\[ \frac{P_2}{P_1}=\left(\frac{V_1}{V_2}\right)^\gamma=(8)^{5/3}. \]
Step 6: Simplify the power.
Since $8=2^3$, \[ (2^3)^{5/3}=2^{5}=32. \]
Step 7: State the result.
The pressure ratio is $32$, which is option (1).
\[ \boxed{32} \]