Hey Laura,
I am sorry you are confused by the wording of the question but I believe ftotinc is family income and hhincome is household income.
As for your second question, there is no cut off that I want. You can decide whatever you think is appropriate and justify it. With that said, you should try to link questions together and gain insight from what we have asked you to do in previous questions (like Q8 and what Thorpe's and al (i.e the article guiding the HW) have done...).
Cheers,
Francois