Your daughter has a wonderfully clever teacher who has thought her/himself into knots.

The sentence "The deer and the sheep are grazing in the meadow" can have any of the following meanings:

1. A definite deer and a definate sheep are grazing in a definate meadow.
2. Some definate deer(s) and some definate sheep are grazing in a definite meadow.
3. A definite deer and some definite sheep are grazing in a definite meadow.
4. Some definite deer(s) and a definite sheep are grazing in a definite meadow.

I assume the teacher intended that the sheep and deer of number 2 be put into the singular, in which case I would agree with your daughter, because number 1 is the singular of number 2.

Your teacher, on the other hand, has writtten "A sheep and a deer are grazing in the meadow," which can only mean

1. an indefinite sheep and an indefinite goat are feeding in a definite meadow.

Which sheep and goat are grazing has become unknown. The plural to this would be "(Some) sheep and deer are grazing in the meadow."

Was there a picture accompanying the question showing every last sheep and deer in the meadow but not making it clear which were grazing and which were merely passing through...  on their way - perhaps - to greener meadows?

My advice for your daughter is explain her reasoning once and if the teacher doesn't understand, she will learn a valuable lesson in life: there will always be fools with authority to deal with; and it's up to her to decide which battles are important and which to let go.

Battle not with idiots less you become an idiot,

Hope this brings you peace of mind,

 Nick

High school teacher, Japan