Take a glance at the section regarding filling in forms using web driver within the Selenium documentation and also the javadoc for the Select Class.
To select an option based on the label.
Select select = new Select(driver.findElement(By.xpath("//path_to_drop_down")));
select.deselectAll();
select.selectByVisibleText("Value1");
To get the first selected value:
WebElement option = select.getFirstSelectedOption();
Hope this helps!