The correct answer is A, compound. Because it consists of two independent clauses (Lorenzo peeled + and + (Lorenzo) sliced the potatoes this evening). It cannot be a simple sentence because it has more than one independent clauses. And it cannot be complex because there are no dependent clauses here.
In the beginning, Sir Gawain was given the green girdle by his lover, Lady Bertilak, as a token of their 'love.' She also told him the girdle would make him invincible. When he fought with her husband, Bertilak, he was supposed to win and give him the girdle, however, he failed in doing that. Therefore he continued wearing the girdle as a sign of his shame and failure. His fellow knights felt very compassionate and wanted to show their support for him by wearing a green girdle as well.
The Correct Answer is A) To dance is an infinitive verb form functioning as a noun. Hope this helps!
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