Реши задание на изображении

Краткий ответ:

Once upon a time there lived an old man. He was very kind but poor. One day when he was fishing, he caught a magic fish. The fish asked the old man to let her go. In return she would make his wish come true. While the old man was thinking everything over, the magic fish said that he could choose whatever he wanted. So the old man made a wish.

Почему так:

• Past Simple — для завершённых действий и событий:
  lived, was, caught, asked, said, wanted, made.
• Past Continuous — для действия, которое происходило в определённый момент:
  was fishing, was thinking.
• Could — прошедшая форма модального глагола can в косвенной речи.

Проверка: длительные действия (was fishing, was thinking) образуют фон, а краткие действия (caught, said) происходят на его фоне.