"Where" is perfectly correct. Instead of "where test takers must read" you can also say:
in which test takers must read...
that ask test takers to read...
requiring test takers to read...
These three suggestions view questions as "things": "a thing in which..", "a thing that...", and "a thing requiring..."
It is also permissible to think of a question as a place, and that is why it makes sense to talk about "a question where..."
Here are other examples where "where" refers to things that are not places:
"Adding fractions is where I met the limits of my mathematical abilities."
"The piano concertos of Mozart are where I found my bliss".
"He is a great dancer, but the tango is where he really shines."