3. The accompanying table shows the labour demand and supply in a hypothetical economy.

a) What is the equilibrium wage rate, and how many workers would be employed?

b) Suppose that the wage rate increases to $8.50. How many workers are employed? How many are unemployed?

c) How many of the unemployed are workers who have lost their jobs? Why is this figure less than the total number of unemployed?

Quantity of Labour Demanded

(in millions)

Wage Rate

($)

Quantity of Labour Supplied

(in millions)

12.8 6.00 11.0 12.4 6.50 11.5 12.0 7.00 12.0 11.6 7.50 12.5 11.2 8.00 13.0 10.8 8.50 13.5 10.4 9.00 14.0 10.0 9.50 14.5