3. Suppose you are given two points on a demand curve. At price PI = $4, the quantity demanded is Q1 = 10. At price P2 =$2, the quantity demanded Q2 = 12. Calculate the price elasticity of demand at both point 1 and point 2. Also calculate the arc-price elasticity of demand between the two points. 4. Suppose that the price of "other" stuff X is $10, the price of medical care m is $20, and your income I is $100. a. What is the maximum amount of X you can buy? What about m? b. Write down your budget constraint and then solve it for m. c. Sketch a graph of your budget constraint. 5. Now suppose the prices remain constant, but your income doubles to $200. a. Write down your new budget constraint and solve it for m. b. Sketch a graph of your old budget constraint and the new one on the same graph. 6. Suppose that you are choosing a bundle of "other" goods X and medical care m. We said in class that at the bundle that maximized your utility, the slope of the indifference curve is equal to the slope of the budget constraint. a. Illustrate this graphically. b. Write this down as a formula