Well, we know that setting is location and surroundings, usually! Irony/sarcasm doesn't apply here, as it's usually in the form of dialogue or much more than those statements.Even if you were confused about tragic resolution, you know enough that there isn't anything particularly 'tragic' nor 'resolving' about this excerpt. So characterization seems best fit, giving an idea on the individual and their attire and how they are interacting with the other! But please, you're free to interpret it yourself in any case if doubtful upon my own.