Suppose Governor Meridias decides to initiate a state income tax. The first $50,000 of household income is tax-free, while any income above $50,000 is taxed at 10%. A household earning $50,000 has a marginal tax rate of _____ and an average tax rate of _____.
A) 10%; 10%
B) 10%; 0%
C) 0%; 0%
D) 0%; 10%
Correct Answer:
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