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

Question

Quizplus · Accepted Answer

The total value that Doug places on his consumption of computer games is not just based on the price and quantity demanded, but also includes his consumer surplus, which is the difference between the value he places on the games and the price he pays for them. Therefore, the best choice is E, where the total value equals his total expenditure plus his consumer surplus.

The Total Value That Doug Places on His Consumption of Computer