Instructions: This exam is open book and open notes, but you may not collaborate with any other students.

Consider each of the following scenarios. Draw and explain the effect each scenario would have on a competitive labor market, discussing which workers or firms are most likely to be affected, whether demand or supply would shift and why (your explanation should begin with the effect of the scenario on either the worker's or the firm's optimization problem, as appropriate), in which direction supply or demand would shift, and what you expect would happen with equilibrium wage and quantity of labor as a result.

3) Avoidance behavior during a pandemic decreases consumer demand for dine in restaurants.