The following models describe wages for low-skilled labor.

Chapter 4, Problem 4.1.136

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The following models describe wages for low-skilled labor. Demand Model p=0.325x+5.8 Price of labor (per hour) Millions of workers employers will hire Supply Model p=0.375x+3 Price of labor (per hour) Millions of available workers (Source: OSullivan and Sheffrin, Economics, Prentice Hall, 2007.) a. Solve the system, and find the equilibrium number of workers, in millions, and the equilibrium hourly wage. b. Use your answer from part (a) to complete this statement: If workers are paid per hour, there will be million available workers and million workers will be hired. c. In 2007, the federal minimum wage was set at $5.15 per hour. Substitute 5.15 for p in the demand model, p 0.325x 5.8, and determine the millions of workers employers will hire at this price. d. At a minimum wage of $5.15 per hour, use the supply model, p 0.375x 3, to determine the millions of available workers. Round to one decimal place. e. At a minimum wage of $5.15 per hour, use your answers from parts (c) and (d) to determine how many more people are looking for work than employers are willing to hire.