$ rake db:create
Could not find gem 'sqlite3-ruby (>= 0, runtime)' in any of the gem
sources listed in your Gemfile.
Try running `bundle install`.
So I ran bundle install and got the same error.
This is my config/database.yml file:
# Warning: The database defined as "test" will be erased and
# re-generated from your development database when you run "rake".
# Do not set this db to the same as development or production.
Thank you for your patience with a noob.