- Maybe? Not really. I don't think anyone cares.
- I would advise against reporting this to anyone.
1.) This isn't a peer-reviewed paper; it's a homework assignment. It's also an assignment in a field that isn't well supported by years and years of instructional material, like textbooks, etc. So It's hard for instructors to come up with good assignments. If your instructor had taken a problem out of a textbook and given it to you, would that ping your suspicions? (I can hear someone arguing: "But wait! If it was from a textbook, I would know it wasn't his own work, and I wouldn't be suspicious." To which, I would reply: "Sure; see previous point about not much in the way of established instructional material. Also, if your instructor had given the class a citation, it might have included solutions.)
2.) If this was in a book published by your instructor (and I don't mean a fancy set of handouts, I mean published), maybe someone would be upset. Perhaps the original author. If you bring this to the higher ups in the university, I could see more potential difficulties for yourself than for your instructor.
Is this the "best" instructional practice? No. Is this commonly held to be "OK" instructional practice? I think you will find, yes, it is.