What are the two people talking about in this conversation?

M: Let’s look at a few things about English. (4)What is a compound word?
W: Two chemicals mixed together?
M: Very funny, but no.
W: Two words mixed together?
M: Well, yes, in a manner of speaking. A compound word is made up of two or more words that express a single idea. There are different ways that compound nouns can be formed. We are going to concentrate here on the noun plus noun form. Can you come up with any examples?
W: Doghouse, dog plus house; cupcake, cup and cake.
M: Excellent. (5/6) There are three different ways to form this type of compound noun: there is the closed form, in which the words come together as one, such as firefly, keyboard, notebook.
W: Textbook, fireplace.
M: Great. And (5)there is the hyphenated form ski-boot, daughter-in-law, sin-pack... The last form of compound nouns is the open form, such as Post office, history book, mineral water. Just exactly how and why these three exist is not clear, but it seems likely that the process will begin with two words, become hyphenated after a time, and then eventually end up as just one word. Language is a living thing and always changing.