Question

Which excerpt from The Fellowship of the Ring shows an element of fantasy?

It was driven by outlandish folk, singing strange songs: dwarves with long beards and deep hoods.
He wore a tall pointed blue hat, a long grey cloak, and a silver scarf.
At Bilbo’s front door the old man began to unload: there were great bundles of fireworks of all sorts of shapes
His real business was far more difficult and dangerous, but the Shire-folk knew nothing about it.

Answer 1

The first excerpt: "It was driven by outlandish folk, singing strange songs: dwarves with long beards and deep hoods."
Reason: it explicitly names dwarves, a mythical/fantastical race, which is a clear element of fantasy.