Solution 1:

The code is okay but you are in the wrong directory. You must run these commands inside your rails project-directory.

The normal way to get there from scratch is:

$ rails new PROJECT_NAME
$ cd PROJECT_NAME
$ rails generate model ad \
    name:string \ 
    description:text \
    price:decimal \
    seller_id:integer \
    email:string img_url:string

Solution 2:

The error shows you either didn't create the rails project yet or you're not in the rails project directory.

Suppose if you're working on myapp project. You've to move to that project directory on your command line and then generate the model. Here are some steps you can refer.

Example: Assuming you didn't create the Rails app yet:

$> rails new myapp
$> cd myapp

Now generate the model from your commandline.

$> rails generate model your_model_name 

Solution 3:

For me what happened was that I generated the app with rails new rails new chapter_2 but the RVM --default had rails 4.0.2 gem, but my chapter_2 project use a new gemset with rails 3.2.16.

So when I ran

rails generate scaffold User name:string email:string

the console showed

Usage:
   rails new APP_PATH [options]

So I fixed the RVM and the gemset with the rails 3.2.16 gem , and then generated the app again then I executed

 rails generate scaffold User name:string email:string

and it worked

Solution 4:

You need to create new rails application first. Run

rails new mebay
cd mebay
bundle install
rails generate model ...

And try to find Rails 3 tutorial, there are a lot of changes since 2.1 Guides (http://guides.rubyonrails.org/getting_started.html) are good start point.