I have one question in my mind that can we test the in-app purchase application in Google Apis emulator with different api level?
Any information regarding this will be welcomed.
You cannot test services like in app billing and LVL on emulators as they lack Google Play, which acts as a middleman between your app and then launch Google servers. Additionally, the accounts you can configure on the emulator are limited in functionality.
See this for details on testing.