Andy puts some pieces of paper on a drum and then hits the drum with a drumstick. What observation supports the idea that sound is produced by vibration?

The vibration of the pieces of paper.

Explanation:

After Andy hits the drum with a drumstick a force is applied on the drum, this produces that the drumhead vibrates generating sound. This vibration is then transmitted to the pieces of paper which also vibrate.

Though she hits the drum, the papers on the drum also vibrate.

This is due to the fact that when she hits the drum, the shock waves created by the hitting travel through the skin of the drum and radiate outwards. When they encounter the papers, some of this energy is transmitted to the papers and the papers also vibrate.