Suppose the Tax Rate on the First $10,000 Income Is

Multiple Choice

Suppose the tax rate on the first $10,000 income is zero 10% on the next $20,000;20% on the next $20,000;30% on the next $30,000;and 40% on any income over $80,000.Family A has income of $40,000 and Family B has income of $100,000.What is the marginal and average tax rate for each family?

A) Family A: marginal--20%;average--15%;Family B: marginal 40%;average 20%.
B) Family A: marginal--20%;average--10%;Family B: marginal 40%;average 23%.
C) Family A: marginal--20%;average--20%;Family B: marginal 40%;average 40%.
D) Family A: marginal--10%;average--10%;Family B: marginal 30%;average 30%.