My school is pretty bad and doesn’t offer that many AP classes. Will I still get compared to the students of all the better schools in my city? Or will I get compared to students at my school?
You are evaluated based on what is available at your school. You will not be penalized for what your school does not offer.
However, if your school offers few APs, you’ll be expected to take them all (or nearly) and to try everything possible to expand your learning (dual enrollment, virtual school… )
Your guidance counselor will send a “School Profile” along with their recommendation.
It includes things like Average SAT score, how many Merit Finalists there were, how many AP courses, average scores on AP tests, and what courses are offered.
So like @sybbie719 said, you are evaluated in the context of your school.
So if you have a 1200 SAT but your school average is 900, that tells colleges something. But if you have a 905, that tells them something else.
If you have taken 2 APs, but they only offer 2 APs, then you have taken the hardest schedule that you can.
Even better is if you can look at Dual Enrollment if that works for you so you can take more advanced classes.