The accompanying table shows the price and yearly quantity sold of souvenir T-shirts in the town of Crystal Lake according to the average income of the tourists visiting.

Price $ 4 5 6 7

Quantity of Tshirts demanded when 3,000 2,400 1,600 800

average tourist income is $20,000

Quantity of Tshirts demanded when 5,000 4,200 3,000 1,800

average tourist income is $30,000

1. Using the midpoint method, calculate the price elasticity of demand when the price of a T-shirt rises from $5 to $6 and the average tourist income is $20,000. Also calculate it when the average tourist income is $30,000. (10 marks)

2. Using the midpoint method, calculate the income elasticity of demand when the price of a T-shirt is $4 and the average tourist income increases from $20,000 to $30,000. Also calculate it when the price is $7. (10 marks)