Answer
a. 4 million workers and 4.50 per hour
b. 4 million workers and 4.50 per hour (same as a.)
c. 2 million workers
d. 3.7 million workers
Work Step by Step
a. To obtain the equilibrium price and quantity, set the demand function and supply function equal to one another
Demand curve: p = -0.325x + 5.8
Supply curve: p= 0.375x +3
0.375x +3 = -0.325x + 5.8
0.7x = 2.8
x = 4
Equilibrium quantity: 4 million
Plug x into p= 0.375x +3
p= 0.375(4) +3
p = 4.5
Equilibrium quantity: 4.50 per hour
b. p= 0.375x +3
Plug in $4.50
4.5 = 0.375x + 3
1.5 = 0.375x
x = 4
4 million workers
c. Plug in 5.15 into the demand curve
p = -0.325x + 5.8
5.15 = -0.325x + 5.8
-0.65 = -0.325x
x = 2
2 million workers will be demanded
d. Plug in 5.15 into the supply curve
5.15 = 0.375x +3
2.15 = 0.375x
x = 5.7
There is a supply of 5.7 workers
e. Finding the surplus amount at 5.15:
Supply of workers - demand of workers
5.7 million workers - 2 million workers = 3.7 million workers