The answer is (b): the level in the alcohol tube will rise, but the level in the water tube will fall, as seen in an mpeg video by clicking your mouse on the photograph at the right below.
This is a problem involving surface tension.
When the bottle is filled with a mixture of sand and alcohol and gently tapped so that the sand grains will move together as much as possible, the alcohol will fill many of the voids between the particles of sand. However, when the bottle is filled with a mixture of sand and water and gently tapped so that the sand grains will move together as much as possible, the water will be excluded from many of those voids between the particles of sand, due to its much greater surface tension. This behavior, known is dilatancy, is why stepping on the sand at a beach immediately after a water wave has receded opens up the space between the sand particles so that the water flows down into the sand, leaving the sand whiter (dryer).
See Question #171 for another example of dilatancy. Incidentally, the term "dilatancy" has at least two other usages in science besides that described here.
