1) Suppose Roma tomatoes (x

1

) and Cherry tomatoes (x

2

) are perfect substitutes for Vince.

Vince is always willing to trade 4 Cherry tomatoes for 1 Roma tomato.

a) What is a possibility for Vince's utility function? (4 points)

u(x

1

, x

2

) = ___________

b) Suppose that Roma tomatoes cost $1 per tomato and Cherry tomatoes cost $0.20 per

tomato. However, the store selling Cherry tomatoes requires a membership fee. If Vince's

income is $40, what is the most he is willing to pay for the membership fee? (Hint: recall that

we assume consumers always choose whatever will yield them the highest utility) (8 points)