To the latest setup and information if you have installed the Android Studio (i.e. 1.5) and trying to target SDK 4.0 then you may not be able to locate and setup the and AVD Emulator with SDK-vX.XX (with Google API's).
See following steps in order to download the required library and start with that. AVD Emulator setup -setting up Emulator for SDK4.0 with GoogleAPI so Map application can work- In Android Studio
But unfortunately above method did not work well on my side. And was not able to created Emulator with API Level 17 (SDK 4.2). So I followed this post that worked on my side well. The reason seems that the Android Studio Emulator creation window has limited options/features.
Google Play Services in emulator, implementing Google Plus login button etc