Gasoline contains C and H atoms. During combustion, the carbon (C) from the fuel combines with oxygen (O2) from the air to produce carbon dioxide (CO2).
2 C8H18 + 25 O2 → 16 CO2 + 18 H2O.
Combustion reactions release large amounts of heat. They have negative enthalpy. A negative enthalpy represents an exothermic reaction, releasing heat. This reaction is spontaneous and exothermic, since we can obtain energy from the reaction; the ΔG (free energy) is negative (So 1 is true).
ΔG < 0, so the free energy of the system decreases with the reaction. Remember that when there is a negative ΔG the reaction goes from higher free energy to lower free energy, like in this case.