W: I baked some cookies. Pick your favorite.

M: Wow! Looks yummy. I'd like a round cookie, please.
W: A round one? You mean the one with a star?
M: No, I mean the cookie with a bear on it.
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What is the full form of "Looks yummy"?
1. It looks yummy.
2. This looks yummy.
3. That looks yummy.

The shortened form could mean any of the three you wrote. Nice!