l. T he US. Tobacco Settlement Agreement between major tobacco companies and 46 states caused the price of cigarettes to jl'p $0.45 {21%) in November 1998. Levy and Meara [2006) found only a 2.65% drop in prenatal smoking 15 months later. (1.) 'What is the elasticity of demand for prenatal smokers? (This is exercise 5.1 from your text.) (ii) Ecigacrettes were introduced in the [18. about 5 years later. What do you think the introduction of ecigarettes has done to the elasticity you just calculated? Explain your