Suppose the income elasticity of demand for food is 0

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Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is (-1.0). Suppose also that Luciana spends $10,000 a year on food, the price of food is $2, and that her income is $25,000.

a. If a sales tax on food caused the price of food to increase to $2.50, what would happen to her consumption of food? (Note: Because a large price change is involved, you should assume that the price elasticity measures an arc elasticity, rather than a point elasticity).

b. Suppose that Luciana gets a tax rebate of $2500 to ease the effect of the sales tax. What would her consumption of food be now?

c. Is she better or worse off when given a rebate equal to the sales tax payments? Draw a graph and explain it.