Suppose you are collecting data from a country like Japan where the government sets the price of health care. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 is displayed in the table.

Region	Outpatient visits	Price/visit
Tokyo	1.25/month	20
Hokkaido	1.5/month	10

1. What is the arc price elasticity of demand for health care consumers in Japan (using only this data)?
2. Suppose that incomes are generally much higher in Tokyo that Hokkaido. Is your answer to the last question an overestimate or underestimate of price elasticity? Justify your answer. [Hint: It may be helpful to plot the data points from the table and consider likely demand curves for Tokyo and Hokkaido.]
3. Using your estimated elasticity, what would the demand for health care be if the price in Tokyo were raised to 30 per visit? What would the demand in Hokkaido be if the price were lowered to 5 per visit?