Final answer:
The best activity showcasing first-graders applying decoding and encoding as reciprocal literacy skills is writing sentences with CVCV patterns after related word-sort activities.
Step-by-step explanation:
The literacy activity that best demonstrates a first-grade student applying the literacy principle of decoding and encoding as reciprocal skills is: Writing teacher-dictated sentences that include words in the CVCV pattern following instruction and word-sort activities using the pattern. This activity involves both recognizing (decoding) and constructing (encoding) words using learned phonetic patterns, which are fundamental skills in early literacy development. By engaging in word-sort activities, the student practices organizing and categorizing words based on common patterns, reinforcing their understanding of word formation.