"We have bread."
Translation:Wir haben Brot.
In general, don't rely on Duo to teach you grammar. You're going to have to do research on your own. Here is a page that starts to explain capitalization. (Yes to your noun capitalization question) http://german.about.com/library/weekly/aa020919a.htm
why does sie haben brot now work?
Sie should not be accepted. If it is, please report it as an error.
If your sentence had a typo and you meant to write "why does sie haben brot not work?", the sentence you're asked to translate uses "we", not "they". "We" includes the speaker (1st person plural), "they" does not include the speaker (third person plural). we = wir; they = sie
Hope that helps.
Both are right. The suggested answer that I see at the top of the screen right now is "Wir haben Brot". The reverse, "Brot haben wir", just puts emphasis on the word "Brot", so you're stressing the fact that it is bread that you have (as opposed to something else like cheese or wine). Without context, the most natural choice is "Wir haben Brot".
Wie is "how". Back to the wir haben brot: this is correct. Just as " Sie haben brot" is correct if it is the plural and not the singular female. However, when the first letter is capitalized (beginning of the sentence) it is impossible to determine. That is why our books had pictures so we could distiguish it.
Normally the plural is "haben": wir haben, sie (they) haben. "habt" is only for 'ihr' (the plural of 'du'). "ihr" can be you and another person, for instance: 'you and your brother or sister', 'you and your husband or wife' or "ihr" can be 'you and several other persons', for instance: 'you and your family' or you and your two or more friends'. You and your friends have is in German: du und deine Freunde, ihr habt.