how do the bids work if i made it $1
It depends on the industry, campaign type, competitors in the auction and lots of other variables.
Google AdWords is a auction based system. Every location, industry, product, service, etc.. are different. And every moment is different as people enter the auction (both competitors and searchers).
What this means is that a bid of $1, in generic terms, like discussing it here, is a moot point. If placed on the display network, a bid of $0.20 might get you solid action and so the $1 bid would be wasting money. If placed on the search network in a competitive industry, the going bid to place at the top of the first page might be $18.73 and the $1 will bring really no performance.
You would be best served to dig into your AdWords account and once you have the campaign set up, allow the system to tell you how that $1 bid might perform.
If we can help further, please do let us know.
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