According to Tobin's q theory, when equity prices are low the market price of existing capital is ________ relative to new capital, so expenditure on fixed investment is ________

In the Stackelberg model, the leader has a first-mover advantage because it

A) has lower costs than the follower. B) commits to producing a larger quantity. C) reacts to the follower's decision. D) differentiates its output.

Which of the following best describes the short-run problem faced by farms?

A. New technology has increased the productivity of farmers and therefore resulted in declining farm prices and low farm incomes. B. The highly inelastic nature of agricultural demand, together with fluctuations in exports of farm goods, has caused small year-to-year fluctuations in farm output to result in highly unstable farm incomes. C. The supply of farm products has increased relative to the demand for them, and because demand is inelastic, prices of farm output and farm income have therefore declined. D. The demand for farm products has increased relative to their supply, but the elastic nature of agricultural demand has caused these shifts to result in declining farm incomes.