What is the right course of action here?

Both answers 1 and 2 are correct because you and the motorbike are on the priority road, while the yellow car is coming from a side road that must yield.

The sign combination (give way sign with the diagram) shows that the priority road bends from your direction to the right. That means traffic on this “bending” priority route has right of way over traffic entering from the side road on the left. So the yellow car must wait until the priority road traffic has passed.

Between you and the motorbike, normal right-of-way rules apply on the priority road: the motorbike is coming from your left and wants to go right, and you are going straight. In an uncontrolled situation like this, “right before left” applies, so you must let the motorbike go first. After the motorbike has passed, you may proceed; the yellow car still has to wait for both of you.

Rule of thumb: Priority road decides who yields against side roads; among vehicles on the same priority road, use “right before left” unless signs/traffic lights/lane markings say otherwise.