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Question 1 [8 points]
a) For their thanksgiving holidays Americans eat turkey. This results in a spike in demand for turkeys in the weeks before Thanksgiving. Despite this, the price of frozen turkeys usually falls in the weeks leading up to Thanksgiving. Explain why using the economics of demand and supply. [3 points]
Answer: The merchants predicted the increase in demand during thanksgiving and stock up more frozen turkey supplies beforehand. Therefore, the supply of frozen turkey increases far more than demand, leading to a surplus of frozen turkey. The surplus causes the fall in frozen turkey price in the weeks leading up to Thanksgiving.
b) In contrast to frozen turkeys, the price of fresh free-range turkeys normally increases in the weeks leading up to Thanksgiving. Using demand and supply analysis, explain why this might be the case? [3 points]
Answer: Unlike frozen turkey, the fresh free-range turkeys cannot be stock up too for long beforehand, otherwise, the quality will be lowered. Compared with the strike increase in demand, there are not enough supplies of fresh free-range turkey. Therefore, the shortage of fresh free-range turkeys leads to the increase in the price of fresh free-range turkey.
c) The cross elasticity of demand between the price of fresh turkeys and demand for frozen Turkeys is 0.23. What does this figure tell you about the relationship between the two different types of turkey? [2 points]
Answer: this figure shows these two demands are cross-inelastic. In other words, the change in price of fresh turkey will not largely impact on the demand for frozen Turkey. In relate to question (b), even though there is a shortage of frozen turkey and its prize is high during the Thanksgiving period, the demand for frozen turkey will not increase significantly.

Question 2 [10 points]
In the November election voters in the

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