Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap.  

Southwest Airlines relies on jet fuel to operate its planes. If it chooses to hedge against future changes in fuel prices, what positions (long or short) will it take in the spot and futures markets?

What will be an ideal response?

If market price is greater than the minimum of AVC but below the minimum of AC, then

A) the firm will shut down. B) revenue covers variable costs and some of the fixed costs and profit is positive. C) revenue covers variable costs and some of the fixed costs, although profit is negative. D) economic profit is zero.