Scenario 12-3

Scenario 12-3.A taxpayer faces the following tax rates on her income:
20 percent of the first $40,000 of her income;
30 percent of all her income above $40,000.
-Refer to Scenario 12-3.The taxpayer faces

A) an average tax rate of 22.5 percent when her income is $30,000.
B) an average tax rate of 22.0 percent when her income is $50,000.
C) a marginal tax rate of 10 percent when her income rises from $40,000 to $40,001.
D) a marginal tax rate of 50 percent when her income rises from $60,000 to $60,001.