"Is there a city in America?"
Translation:Estne urbs in America?
You use in with the ablative to specify location. Except however, when it is a city, town, small island (one city), or one of the few lucky nouns like domus, then the locative case is used.
So, we cannot say Estne urbs Americae? unless we are talking about a city or town called America (but asking if a city is within another city may not make much sense).