Reference no: EM131067866

Aron's marginal values of hamburgers and French fries, per week, are as follows:

Quantity Hamburgers French Fries

1                 $10                 $6

2                   8                     5

3                   6                     4

Etc              Etc                  Etc

Joe's eats charges $4 for hamburgers and $1 for fries. Jake's Eats charges $2 and $3 for hamburgers and fries.

a) Where does Aron eat, assuming he can't buy burgers in one place and fries in the other? How many burgers and fries does he eat per week?

b) Joe's decides to institute a new pricing policy: 1 burger and 1 order of fries must be purchased together. How much would Aron be willing to tip the waitress per week in order to be able to buy burgers and fries separately, if he eats at Joes? (Hint: You have to combine the marginal values of burgers and fries when assessing the purchases of fries and burgers)