Avia respondet lanam utilem esse, quia ex lana tunicam texere potest.

Because after a verb of speaking/thinking like respondet, Latin commonly uses indirect statement: accusative + infinitive (often called ACI).
So Avia respondet lanam utilem esse literally means Grandmother replies wool to be useful, i.e. Grandmother replies that wool is useful.
In an ACI, the “subject” of the infinitive (esse) goes into the accusative, so lana becomes lanam.

For the same reason: it’s an indirect statement. Latin prefers:

• direct: Lana utilis est = Wool is useful
• indirect after respondet: lanam utilem esse = that wool is useful

Also notice agreement: lanam is feminine accusative singular, so the adjective must match: utilem (fem. acc. sg.).

Respondet means she answers / replies. In Latin it often introduces either:

• a reply to someone with a dative (e.g., puero respondet = she replies to the boy), and/or
• the content of the reply using an ACI (as here): respondet lanam utilem esse.

So the sentence gives the content of the reply, not necessarily the person replied to.

Avia is nominative because it is the subject of respondet.
Avia means grandmother (more literally “grandmother” on either side; Latin can be less specific than English unless context clarifies).

After ex (meaning out of / from), Latin uses the ablative.
So ex lana = from/out of wool, with lana in the ablative singular.

Quia introduces a reason clause: because.
Latin can also use quod or quoniam for because, often with small differences in style or emphasis. Here quia is straightforward:
...utilem esse, quia... = ...that it is useful, because...

It’s understood from context and is she (i.e., avia). Latin often drops subject pronouns because the verb ending gives the person/number.
potest = (she) can.

Because potest is a finite verb meaning can/is able, and it typically takes a complementary infinitive to complete its meaning:

• texere potest = she can weave

Using texit would change the meaning to a statement about what she actually did:

• texit = she wove / she has woven

Tunicam is the direct object of texere (to weave).
Texere is transitive here: to weave something, so tunicam is accusative singular: a tunic.

Yes. Texere means to weave (also to braid/construct in some contexts), and clothing is a normal object for it.
So tunicam texere is a natural way to say to weave a tunic.

Latin word order is flexible because meaning is largely shown by endings (cases) rather than position. Common features here:

• lanam utilem keeps noun + adjective together, but the key is agreement, not position.
• texere potest often places the infinitive before the verb, but potest texere would also be possible with a slightly different emphasis.

The endings tell you the roles: avia (subject), lanam (accusative “subject” of esse), lana (ablative after ex), tunicam (object of texere).

Yes, you can use a clause with quod/quia meaning that, though it’s often less classical than ACI depending on author/style:

• Avia respondet quod lana utilis est... = Grandmother replies that wool is useful...

But the given Avia respondet lanam utilem esse is the very standard Latin way to express she replies that...