f.6econ, 關於cost & use value問題

This is a past paper question. Here is the SHORT MARKING SCHEME solution:

Errors aside, no one, in voluntary basis, will pay more than what he is willing to pay. One will not pay less than what he is willing to pay, or else he is inconsistent with the constrained maximization. So what he will pay at the margin is his marginal valuation.

In the view of buyers and sellers, maximum of what the buyers are willing to pay is what the sellers can extract from them. So this average maximum would be the consumers’ average valuation.

Under constrained maximization, the highest-valued option forgone is the only option relevant for decision making, i.e. the one constitutes the only relevant alternative choice.