These kinds of implementation details are so interesting to think about. I think if you've got a single individual occupying, say, an Earth-sized simulation with billions of NPCs, then the society as a whole isn't making the best use of its computational capacity because 99.99% of the simulation will go un-experienced. Then again, we've got billionaires today who possess enormously more than a proportionate share, so maybe it'll happen.

On the other hand, if the simulation is render-on-demand, where only the things within range of your senses are fully simulated, then maybe an Earth-sized sim isn't much more expensive than a city-sized one, or even a house-sized one.