Answer:
The sentence that uses quotation marks correctly is:
"First," the teacher said, "let's all introduce ourselves and name our favorite books."
This sentence correctly uses quotation marks to indicate that the words "First" and "let's all introduce ourselves and name our favorite books" are being spoken by the teacher. The comma after "First" indicates that it is being used as an introductory word, and the period after "books" ends the sentence.