Since I can’t be around this week, there are a few things I am assigning to you that will go over the issues of markets, market failures, public goods, and externalities. These assignments are required and will be on our next exam. First please listen to the “cappuccino” podcast and the “lighthouses” planet money podcasts which can be found on the course website. I would like you to all think about how the price system is used to convey information but also the drawbacks of the price system. With many goods there are externalities that cannot be internalized without outside intervention. (You can read about this more in the “Hubbard micro chapter 5” listed on the website.) Public goods fall into the category of a situation where markets can fail. Finally I would like you to watch a video by PBS Frontline called “College Inc.” which discusses the shift from publicly subsidized education and private education. Try to think about education from the perspective of whether or not it is a public good and how it should be provided. Should we be demanding more or less education and how might we reach that goal. We will be discussing this material next week.