Final answer:
The sentence 'Steve knows it's best to wait until October to carve a pumpkin.' correctly shows the use of an apostrophe to form a contraction.
Step-by-step explanation:
The sentence that correctly shows how the apostrophe is used to form a contraction is: Steve knows it's best to wait until October to carve a pumpkin. In this sentence, the contraction 'it's' stands for 'it is.' The apostrophe is used to replace the letter 'i' in 'is'.
Learn more about apostrophe usage in contractions