1. Discuss two reasons that government should intervene in the operation of free markets and give two examples of real-world government policies or programs motivated by these reasons. 2. Since education yields private market returns, which are fully captured by the person who makes the investment, the market will provide the optimal level of education and the govern- ment should not intervene. 3. The Tiebout model states that the correct level of public goods will be provided by the local government (only consider public goods provided by the local government.) Discuss the underlying assumptions and whether you believe they hold in reality.