People eat at restaurants less often when their incomes fall because of a recession. Eating at restaurants must be

Refer to the table above. If Jack has an annual income of $50,000 and Jill earns $77,500, which of the following is true?

A) Jack and Jill pay an equal amount of tax. B) The average rates of tax paid by Jack and Jill are equal. C) The marginal tax rate for Jack is higher than the marginal tax rate for Jill. D) Jack and Jill fall in the same tax bracket.

Choose the incorrect statement.

A) When the quality of a good improves over time and as a result the price rises, the CPI counts the entire price rise as inflation and so overstates inflation. B) The outlet substitution bias injects an upward bias into the CPI. C) The CPI basket is constantly updated to allow for the introduction of new goods. D) When relative prices change and people substitute to the lower priced good, the CPI ignores the substitution and the CPI overstates inflation. E) All of the above statements are incorrect. C) The CPI basket is constantly updated to allow for the introduction of new goods.