Determine what they are trying to ask, and what you will need to solve it
Eliminate any non-essential information
Draw a picture, graph, or equation
In moments of high stress like exam taking, always work with the paper they give you to avoid careless mistakes.
Solve.
Approach: this question is attempting to see how well you can formulate an equation that will generalize this pattern. With the information given, you can either spend half the exam time drawing out every single toothpick in a 10x10 square, or you can save your time by drawing out the first few steps and then making an equation you can use to solve the 10x10 problem.
FIrst, start out by drawing squares that follow this rule and find the differences between them.