Hank is temporarily disabled and has been collecting rocks to pass the time. Walt Jr. and Hank are both impressed with a pink rock, which Walt goes on to describe why the rock gives it that color. This is a good example of a positive statement, which is a testable statement that has a right or wrong answer. It is not based on some value judgement (like the rock looking cool).
Gus Fring confuses the DEA chief, George Merkert, because when he invited him over to his house and Fring seemed like a good person. However, it turns out that people can hide who they really are and appear to be what others want them to be. Fring knew the entire time that he was manufacturing large quantities of methamphetamine and yet he was having dinner with his potential captor. This clip represents a starting point for a discussion about asymmetric information, which occurs when one party holds relatively more information about an exchanged good.
Walter takes a trip back to his old Albuquerque home to see what’s left of it. After Skyler and the kids leave, no one wants the house and so it has succumbed to vandalism. Normally, property rights would incentivize people to take care of their property and protect it against vandalism, but no one wants an old meth kingpin’s home.
It looks like Hank has finally cost Jesse in the RV and he’s on the hunt to arrest him for meth production. In the process of trying to break into the RV, the owner of the junkyard asks if Hank has a warrant for the RV he’s trying to break into. While pleading his case, Hank doesn’t want to believe that he needs a warrant, but probable cause and the Fourth Amendment are in place to protect people and their personal property. It establish property rights and doesn’t allow the police to violate that property at their own will.
There’s a lot of different complements and substitutes that go into a meal. Fries and ketchup are complements, while sushi and burgers are substitutes. The collective decisions we make are influenced by a variety of different products and aren’t isolated to a single market.
In order to start producing large quantities of meth, Walter comes up with a new chemical approach to producing a substitute for pseudoephedrine. This “old school biker” meth is a lost art, but it narrows down the number of people who understand how the chemistry works. When resources are in short supply, prices typically rise. The responsiveness of firms to their inputs often deals on how easily other resources can be acquired.
There’s an arrest on school property, and Hank shares why he believes the janitor was responsible for the recent thefts at the school. The theft corresponds to popular equipment used to make meth, and the janitor (Mr. Archilleya) had a past record for possession of marijuana, had access to the school, and during a search of his vehicle, had possession of marijuana. Skyler is confused how Hugo could even get a job at a school with his record, but Walt notes Hugo doesn’t seem like a drug dealer. This is a classic example of mixing correlation with causation. Just because Hugo has markers that could potentially make him a criminal, it doesn’t mean that it would cause him to be willing to steal from his employer. Society often mixes correlation with causation, which results in some unfortunate outcomes.