ahem... civitas (gen. civitatis) means a classical city state (or Polis) such as Rome, Athens, Sparta, Thebes (etc). It doesn't really mean a "state" in the modern sense of the word. A better translation would have been City. When I see the words "estne civitas" I automatically translate this as "is it a city?" into English -- because that is what sounds most logical or natural in English. I certainly wouldn't pick Duolingo's dodgy translation. The modern English word "state", in Latin, would surely be better translated, into Latin, as res publica (i.e. "commonwealth") or dioecesis (gen. dioecesis).
I am wondering about the translation to "is there a state." I don't know Latin at all, but in its offspring languages there are different verbs for there is/there are as opposed to to be. So I would think the sentence meant, "Is it a (or the) city state?" I did check a dictionary and couldn't find any separate word for there is.
The audio on this course is the worst of any Duolingo course I have encountered. On some of the samples you can hear the click as they turn off the microphone. On others there is white noise. On others there is a silent delay after the word which sometimes causes the next word to be missed. One of the females seems to be trying to be an actress by including an emotive context to the audio examples - which reduces clarity. I have reported many of the worst ones, but really there is too much bad audio for me to report them all.
While I suppose there is nothing incorrect about this question in either the Latin or English, it strikes me as particularly odd. Should it actually mean something else? It is certainly not something that would be said in every day English conversation.
Duolingo is not about teaching neat and tidy everyday conversation. It is about teaching grammar and vocabulary, giving you the building blocks. Duolingo is famous for its whimsical sentences such as "The monkey reads a book". Right now, especially this early in, the sentences are nothing more than a vehicle for grammar and vocabulary.