Question

on the top of the hill lived a hermit identify subject and predicate

Answer 1

A hermit lives on the top of the hill. Tipically, in a sentence (clause), everything that comes after the subject or everything that is not the subject is the predicate. Consequently, the predicate in your sentence is lives on the top of the hill
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Answer 2

The subject and predicate in the following sentence is:

Subject: a hermit

Predicate: on the top of the hill lived

Generally, subject would be the name of a person or the thing that we are speaking about in the context and predicate is something that is telling about the subject.  

The subject would come first in the sentence followed by predicate.