You are out for a walk on Highland Island, populated by two tribes. Those in the Chocolate tribe always tell the truth. Those in the Peach tribe always, always lie. You have a friend with you when you encounter three natives. Your friend wants to know who is from which tribe. Appearance alone doesn't tell you who is of the Chocolate tribe (a truth teller) as opposed to the Peach tribe (a liar). To find out, you prepare to ask a clever question.
Not realizing this, your friend impulsively asks the first native straight out what's their tribe. The response is unintelligible. The second native says, "She said that she's a Chocolate. She is and I am too." The third native immediately says: "That's not true. She is a Peach. I'm a Chocolate."
Who is from which tribe? One of them just might give you a banana if you get it right!
Solution
No need need to hear what the first native said. For all the inhabitants of the island, if they are a Chocolate, they will say so, and if they are a Peach, they will lie and say they are a Chocolate. (No one can ever say, "I'm a Peach.")
So the second native, when he said "She said that she's a Chocolate," told the truth. Since that's true, the rest of what he said must be true. The second person added, "I am
The third native's statement, "That's not true," is therefore false—false all the way through. When he says, "The first guy is a Peach, that's false. And also when he says, "I'm a Chocolate."
So, the first two natives are Chocolates and the third is a Peach.