I am studying for an algebra midterm and I am trying to solve the following problem: Is there an action of $S_2$ on $\{1,2,3,4,5\}$ that has exactly two orbits?
So far what I have been thinking is that I know that the order of an orbit must divide the order of the group acting on the set by the orbit-stabilizer theorem. This means that, in this case, each orbit must have order $1$ or $2$. However, because the orbits are equivalence classes, they partition $\{1,2,3,4,5\}$, so the distinct orbits must have in total $5$ elements but if there are two orbits then they have a total of $2$ different elements since each has order $1$. If there are exactly two orbits, then they both must have order $1$. I don't see though how an orbit couldn't have order $2$, because $O_x = \{gx | g \in S_2\}$ and there are two elements in $S_2$.
Am I thinking about this incorrectly?
You are on the right track, I think. Let's clarify things.
If $G$ is a group acting on a set $X$ and $x\in X$ then there is a bijection (even $G$-isomorphism) between the orbit $Gx$ and the collection of all cosets $G/G_x$ where $G_x$ is the stabilizer subgroup for $x$. This is also known as the orbit-stabilizer theorem. In particular this shows that in the finite case $|Gx|$ divides $|G|$, as a consequence of Lagrange's theorem.
And so in our case $G=S_2$ (which has exactly $2$ elements) it means that any orbit (of any action on any set) has either $1$ or $2$ elements. The case when an orbit has one element is trivial: $S_2$ acting on any set $Y$ via $(g,y)\mapsto y$. The case when an orbit has two elements is for example when $S_2$ acts on itself (or disjoint union of itselves) via $(g,h)\mapsto gh$.
And since the set $X=\{1,2,3,4,5\}$ has $5$ elements then it has to have at least $3$ orbits regardless of how $S_2$ acts on it. That's because orbits form a partition of any set.