Ruby on Rails

jquery rails is in the assets group of my gemfile
 

Yes I did run bundle install after adding the gym.
 

I am not sure I am looking in the right place in my application.rb file but here is what I saw at the top of the file:

if defined?(Bundler)
  # If you precompile assets before deploying to production, use this line
  Bundler.require(*Rails.groups(:assets => %w(development test)))
  # If you want your assets lazily compiled in production, use this line
  # Bundler.require(:default, :assets, Rails.env)
end

Here is what my gemfile looks like:

source 'https://rubygems.org'

gem 'rails', '3.2.3'

# Bundle edge Rails instead:
# gem 'rails', :git => 'git://github.com/rails/rails.git'

gem 'mysql2'
gem "meta_search", "~> 1.1.1"
gem "will_paginate", "~> 3.0.0"
gem "daemons", "~> 1.1.3"
gem 'declarative_authorization', "~> 0.5.1"
gem 'authlogic', '3.1.0', :git => 'git://github.com/binarylogic/authlogic.git'
gem 'paperclip', '3.0.4', :git => 'git://github.com/thoughtbot/paperclip.git'
gem 'tiny_mce', '~> 0.1.7', :git => 'git://github.com/kete/tiny_mce.git'
gem 'friendly_id', '~> 4.0.6', :git => 'git://github.com/norman/friendly_id.git'
gem 'simple-private-messages', '0.0.0', :git => 'git://github.com/jongilbraith/simple-private-messages.git'

group :assets do
  gem 'sass-rails',   '~> 3.2.3'
  gem 'coffee-rails', '~> 3.2.1'
  gem 'jquery-rails', '~> 2.0.1'
 
  # See https://github.com/sstephenson/execjs#readme for more supported runtimes
  gem 'therubyracer', :platform => :ruby
  gem 'uglifier', '>= 1.0.3'
end

group :development do
  # gem 'ruby-debug19', '~> 0.11.6', :require => 'ruby-debug'
  # gem 'ruby-debug19', :require => 'ruby-debug'
  gem 'thin', '~> 1.2.11'
  gem 'exception_notification', :git => 'git://github.com/rails/exception_notification.git'
end

group :test do
  gem 'factory_girl_rails', "~> 1.0.1"
  gem 'faker', "~> 0.9.5"
  gem 'shoulda', "~> 2.11.3"
  gem 'simplecov', "~> 0.4.2"
  gem 'mocha', "~> 0.9.12"
  gem 'turn', :require => false
  gem 'minitest'
  # => below for spork
  gem 'guard'
  gem "rb-fsevent"
  gem "spork"
  gem 'spork-testunit'
  gem "guard-spork"
end

# To use ActiveModel has_secure_password
# gem 'bcrypt-ruby', '~> 3.0.0'

# To use Jbuilder templates for JSON
# gem 'jbuilder'

# Use unicorn as the app server
# gem 'unicorn'

# Deploy with Capistrano
# gem 'capistrano'