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I think the answer would be option 3, "In Act III, morality is difficult to judge."
There is a number of words or phrases that you could use to help smooth the transition between sentence 1 and sentence 2, and here are some of them: also, in addition, additionally, furthermore, moreover, on top of that, etc. The meaning of the second sentence adds on top of the first one - so any of these transition words would be a good choice.
In is the answer
Hope it helps :)
