A student has the high-power lens in position and appears to be intently observing the specimen. The instructor, noting a working distance of about 1 cm, knows the student isn't actually seeing the specimen. How so?

Based on this the student is out if the focus, and just viewing on the dust. Basically, high - power lens is a non oil immersion lens, with a short working distance of 1cm, which will be about a few millimeters. Hence the student will be out of focus, just carry out a fruitless effort focusing on the dust, missing the focus on the specimen.