1.8. The case study presented in the chapter discussed cigarette taxes as a way to reduce smoking. Now think about the markets for other tobacco products such as cigars and chewing tobacco.

a. Are these goods substitutes or complements for cigarettes?

b. Using a supply-and-demand diagram, show what happens in the markets for cigars and chewing tobacco if the tax on cigarettes is increased.

c. If policymakers wanted to reduce total tobacco consumption, what policies could they combine with the cigarette tax?