3 cerditos - review

Setting the stage. (Think "once upon a time")

Description/background information

Background information/description ("they were called" not "they called)

side note: Fulano is kind of like "Joe Shmo"; it's not a real name. Zutano and Mengano serve a similar purpose.

CPA (SCAP) - completed past action (not they were deciding... they decided, and it was over)

Both blanks are completed past action.

CPA / SCAP

BEST ANSWER: Completed past actions, so preterite.

If you said both in the imperfect: You were thinking simultaneous past actions. But if you try translating the whole sentence into English, you'll find you don't -ing either verb: They sang and danced. You wouldn't say They were singing and dancing because you're situating yourself after the event.

It's a description, not an action

The first is the imperfect because it's a description, not an action moving the story forward. The second blank is an action/narration moving the story forward, so it goes in the preterite.

CPA/SCAP... and if you read ahead to the rest of the sentence, you would have a slightly different justification (more on that in a moment)