How to get selected Value in the listbox by using form api
1) Try form_test_custom_form_submit($form, &amp;$form_state) {}

2) Try to print all values. print_r($form_state['values']); 


  // $form_state['values']['city']; you may get values here.


You can write $form['city_element_wrapper']['city'] array inside the form_test_form itself, instead of writing inside ajax callback.