If x > 1, then it is always true that x < x^2 < x^3.
If 0 < x < 1, then it is always true that x^3 < x^2 < x.
From the above, you can see that neither statement is sufficient alone, since in each case, x can be positive. Notice from the above that if x is positive, x^2 is never the largest of the three expressions x, x^2 and x^3. Since Statement 1 guarantees that x^3 is not the largest of the three expressions, and Statement 2 guarantees that x is not the largest of the three expressions, then using both statements, the only possibility is that x^2 is the largest of the three expressions. Since that can't happen when x is positive, x must be negative, and the answer is C.
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