What is the significance of Alexander in act 4, scene 1?

The Alexander scene shows the limits of what Faustus is actually capable of doing, even with Mephistopheles's help. He tells the Emperor that he cannot actually raise Alexander from the dead; he can merely create an image of him. The emperor seems impressed, but the audience understands that Faustus has sacrificed his soul for a range of powers that is very contained. He's able to form illusions, but not always to fulfill the realities of what he's asked to do. This revelation expands what the audience has already learned about what mundane things Faustus chooses to do with his powers. He plays games with the Pope, and later has Mephistopheles retrieve grapes from the Southern hemisphere. These are hardly powers worth selling one's soul to the devil for. In this way, Marlowe shows that Faustus's decision was not merely evil, but also foolish.

At the court of Charles V, the emperor challenges Faustus to display his famed magical powers. The emperor requests that Faustus summon up Alexander the Great and his lover from their tombs. Faustus cannot do this, but thanks to Mephistopheles he can conjure up their spirits. Although they will not be bodily present, they will appear perfectly real and tangible. Charles V is motivated primarily by vanity. He sees himself as a great emperor, part of a long tradition of noble rulers and warriors. The emperor has such enormous self-regard that he believes himself to belong to a select company of the great men of world history. Summoning up the spirit of Alexander the Great means that he can literally be in the company of one such great man.
The significance of this scene is that it shows the huge gap between Faustus's elevated self-image and reality. He has always wanted to be renowned throughout the world for his immense learning and erudition. Here he is, however, reduced to performing cheap conjuring tricks for the entertainment of a powerful monarch. Instead of using his powers for the benefit of humanity, he is using them to satisfy the most trivial of demands.