Consumer income changes can shift market demand

NPR ("Certain Green Industries Have Job Openings", November 12, 2008 ) reported on a story about wind turbine manufacturers in Ohio having trouble finding skilled workers

The report noted that as a result tens of thousands of people having been laid off, there is "a huge pool of job-seekers." The firms claim to "offer good pay and benefits." A representative from the United Steelworkers claims that their union members have easily transferrable skills, but the pay is too low, around $30,000 annually. A manager at Apollo Alliance says that workers in the new industry need different skills than those in the old steel industry. The type of unemployment described in the story is ________ unemployment. A) cyclical B) structural C) frictional D) efficiency wage

A beneficial oil-price shock increases labor demand. What happens to current employment and the real wage rate?

A) Both employment and the real wage rate would increase. B) Both employment and the real wage rate would decrease. C) Employment would increase and the real wage would decrease. D) Employment would decrease and the real wage would increase.