The total value that Doug places on his consumption of computer games equals
A) price times marginal value.
B) his marginal utility multiplied by quantity demanded.
C) the total amount he pays for all the games he purchases.
D) his total expenditure on computer games plus his consumer surplus.
E) the price multiplied by quantity demanded.

Question

Quizplus · Accepted Answer

The total value that Doug places on his consumption of computer games is not simply the price times marginal value or marginal utility multiplied by quantity demanded. It also includes the consumer surplus that he gains from purchasing at a price lower than his maximum willingness to pay. Therefore, the best choice is D, which is his total expenditure on computer games plus his consumer surplus.

The Total Value That Doug Places on His Consumption of Computer