DEMAND

4£)

the  person  pays  a  Id.  for  each  apple,  for  the
last  penny  which  he  is  induced  to  spend  on
apples  he  obtains  ten  units  of  utility.  So  it  is
reasonable  to  affirm  that  the  marginal  utility
of  money  to  him  contains  ten  units  of  utility.
Because  of  the  law.of  equi-marginal  returns
another  penny  spent  by  him  in  anything  else
would  buy  only  ten  units  of  utility.  For  the
twelve  apples  he  pays  twelve  pennies,  which
consequently  represent  a  sacrifice  of  12  x  10
units  of  utility,  that  is  120  units  of  utility.
We  may  think  of  the  12  pence  as  withdrawn
from  expenditure  on  twelve  other  things,
involving  a  marginal  loss  in  respect  of  each
of  them  amounting  to  ten  units  of  utility.
Now  the  total  utility  of  twelve  apples  must
be  something  considerably  greater  than  twelve
times  their  marginal  utility,  owing  to  the  law
of  diminishing  utility.  If  their  total  utility
amounts  to  210  units,  the  person  whose  case  we
are  considering  would  enjoy  a  consumer’s  surplus ­
  of  90  units  of  utility,  that  is  210  minus  120.
Another  way  of  bringing  out  the  meaning
of  this  consumer’s  surplus  is  to  say  that  it
represents  the  clear  loss  which  would  be
sustained  by  the  individual  in  question  if  he
could  have  no  apples.  In  such  a  case  he
would  lose  their  total  utility,  210  units,  but
against  this  he  would  have  the  utility  got  by