Questions & Answers about Pečem kruh s kvascem i vodom.
Why do we use the preposition s here? Doesn't the instrumental case already mean 'with'?
You are right that the instrumental case by itself often means 'with' in the sense of using a tool. However, when 'with' means 'accompanied by' or 'containing' (like bread containing yeast and water as ingredients), you must use the preposition s along with the instrumental case.
What is the dictionary form of kvascem, and why did it lose a letter?
The dictionary form is kvasac (yeast). This word has a 'fleeting a', which is an a in the final syllable that drops out when you add most grammatical case endings. After dropping the a, we add the instrumental ending to the remaining stem.
Why does kvascem end in -em but vodom ends in -om?
Masculine nouns in the instrumental case usually take -om, but they take -em if the noun's stem ends in a soft consonant like c, č, ć, š, or ž. Since the stem here ends in c, it becomes kvascem. Meanwhile, voda is a standard feminine noun, which regularly takes -om.