1). Building contractors are required to be licensed. Draw a graph that demonstrates how the licensing requirement influences the market for building contractors. Also, draw a graph to show the market equilibrium if there are no license requirements for building contractors and draw a graph to show the market equilibrium if there are license requirements for building contractors.

2). What happens to consumers' deadweight loss, surplus, and producer surplus when licenses are required?

3). Use the graph you drew above to explain who wins and who loses from licensing regulation? Who pays for the licensing? Explain briefly.

4). Draw a graph that has a positive outcome for the building contractor's market. Show the market equilibrium on your graph and explain how this market equilibrium compares to the market equilibrium in which this benefit is not considered.

5). Does licensing provide a better signal of quality compared to other signals of quality such as online reviews? Explain why or why not.