La respuesta correcta es estábamos
1). Ana y yo vamos a ir a comer.
This is up to you and what your paper says, but the translation is:
We do a project in the English class.
Se encaprichó con estudiar en el extranjero y ahora se ha disgustado porque no podrá hacerlo.
He set his mind on studying abroad and now he's upset because he wont be able to.