Webeginwith ananalysis oftwolawsrelatedtoevictionofarenter.Underlaw1,arenter has 30 days to vacate an apartment after being served with an eviction notice.Under law 2, the renter has 90 days to vacate.Landlords willfind itlessexpensive torent apartmentsunder law1thanunderlaw 2. Underlaw 1, the most money a landlord can lose afterserving an eviction notice

is 30 days' rent. Under law 2, a landlordcan lose 90 days' rent. Obviously, losing90 days' rent is more costly than losing30 days' rent.Adifferentsupplycurveofapartmentsexists under each law. The supply curveunder law 1 (

S

1

in Exhibit 8) lies to theright of the supply curve under law 2 (

S

2

inthe exhibit). Again, that's because it is lessexpensive to supply apartments under law 1than under law 2.Ifthesupplycurveisdifferentunderthe two laws, the equilibrium rent will bedifferent too. As shown in Exhibit 8, theequilibrium rent will be lower under law 1(

R

1

) than under law 2 (

R

2

).Inconclusion,underlaw1,arenterpays lower rent (good) and has fewer daysto vacate the apartment (bad). Under law 2,a renter pays a higher rent (bad) and hasmore days to vacate the apartment (good).Who pays for the additional days to vacatethe apartment under law 2? The renterpays for these additional days by payinghigher rent.

1.Economists oftensay, "There is no such thingas a free lunch." How is this saying relatedto patientsmoving from a system where theycannot sue their HMOs toone where they can?

2.A professor tellsher students that they can have anextra week to complete their research papers.Under what condition are the students better off with the extra week? Can you think of a case wherethe students would actually be worse off with theextra week?