Stupid question... I just realised that of course energy won't be conserved because truly elastic collision only happen at atomic levels.
Actually your wrong, elastic collisions can happen in real world scenarios (not actually but we assume they can), in an isolated system momentum is always conserved, but not necessarily kinetic energy.
'They do not skate': If they have no friction forces, than any further skating would result in an acceleration. Hence they are at constant velocity.
The way to approach this question is to firstly acknowledge that obviously it is a closed system as no external force has been mentioned, this momentum is conserved, than work out initial and final kinetic energy to check if it is an elastic collision. Then select your answer!
Hope that helps.
It's not a stupid question at all, it is a previous VCAA exam question and this what is between you and an A+ on your midyear Physics exam, therefore you adapt yourself to be able to answer that question.