QUESTION 28 Consider the markets for cigarettes and alcoholic beverages in a small town. Suppose that when the average consumer's income is $40,000 per year, the quantity demanded of cigarettes is 30,000 and the quantity demanded of alcoholic beverages is 21,000. Suppose that when the price of cigarettes rises from $8 to $12, the quantity demanded of alcoholic beverages decreases to 19,000. Suppose also that when the average income increases to $56,000, the quantity demanded of cigarettes increases to 34,000. a. Using the midpoint method, what is the income elasticity of demand for cigarettes? (4 points) b. Considering the income elasticity, are cigarettes a normal good or an inferior good? Explain. (2 points) c. Using the midpoint method, what is the cross-price elasticity of demand for alcoholic beverages with respect to the price of cigarettes? (4 points) d. How does the cross-price elasticity of demand for alcoholic beverages and cigarettes in part (c) help policymakers better understand the consequences of a cigarette tax? (4 points)