Minnesota Senator Amy Klobuchar was a candidate for the 2020 Democratic nomination for president. In an opinion column written with Senator Mike Lee of Utah, she argued, “There is evidence that [occupational] licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines.” She also wrote that “licensing requirements should address only legitimate public health and safety requirements to ease burdens on workers.”
a. If Senator Klobuchar’s suggested restrictions on occupational licensing were followed, what would be the likely effect on the rate at which small businesses are formed?

b. Given your answer to part (a), why did state and local governments pass such licensing requirements in the first place?