How is this the answer?

Your answer is correct. Sam has taxable income of $350,000. Sam's nephew Adam has taxable income of $3,500. What federal income tax rate applies to the first taxable dollar of Sam's taxable income and what tax rate applies to the first taxable dollar of Adam's taxable income? 10% and 10%. 10% and 37%. 0% and 0%. 0% and 10%