Answer
(a) decrease
(b) negative
Work Step by Step
(a) We know that the friction does a negative work on the two block system and as a result the mechanical energy is converted into thermal energy. Besides this, the gravitational energy decreases due to loss in elevation. Thus, the overall mechanical energy decrease.
(b) Since the tension acts in the opposite direction to that of the direction of motion of block 2, the tension does a negative work.