Question

Michelle lives one block south of the bank at what point is her house located

Answer 1

It is one block south of the bank?

Answer 2

There's not enough information given to answer the question, because we don't know where the bank is located.  All we know is exactly what we're told: Her house is located one block south of the bank, wherever THAT may be.

Perhaps a picture would help us answer this question.  To be honest, I kind of suspect that there IS a picture that goes along with it, but for some reason you decided not to share the picture with us.