Use the Following to Answer Questions

question 5

Multiple Choice

Use the following to answer questions:
Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50.
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen consumes 1.5 pizzas and 100 sodas, which of the following describes the relationship between his marginal rate of substitution of pizza for soda and the price of pizza in terms of soda?

• A) The marginal rate of substitution equals the relative price.
• B) The marginal rate of substitution is greater than the relative price.
• C) The marginal rate of substitution is less than the relative price.
• D) It is impossible to determine, given the information available.

---

Definitions:

Outstanding Checks

Checks that have been written and recorded in accounting but have not yet been cashed or cleared by the bank.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure accuracy and consistency in financial records.

Outstanding Checks

Outstanding checks are checks that have been written and recorded in the payor's ledger but have not yet been cashed or cleared by the bank.

Deposits In Transit

Bank deposits that have been made but not yet credited to the business's bank account, typically appearing on a bank reconciliation statement.