1. By 10 o'clock yesterday we (to decorate) a Christmas tree with toys and at 11 o'clock we (to have) a Christmas party.

Past Progressive or Past Perfect:

• The Past Progressive is used to describe an action that was in progress at a specific time in the past.
• The Past Perfect is used to describe an action that was completed before a specific time in the past.

Solution:

• 1. By 10 o'clock yesterday we were decorating a Christmas tree with toys and at 11 o'clock we were having a Christmas party.

Explanation: Both actions were in progress at specific times yesterday, so the Past Progressive is used.