Answer:
1. A great city once stood where now lies the village
Step-by-step explanation:
Even though the first part of the sentence is in the past, there is indication that the second part is in the present. That indication is given by the word "now". There was a great city, but now there is a village. Since we are asked to use the verb "lie", we must make sure to pay attention to the subject-verb agreement. The village is what lies (third person singular) where once stood a great city. Therefore:
1. A great city once stood where now lies the village