I will continue the talk from last week and review what are metals and insulators for free fermion systems. By applying the linear response theory to both systems we can calculate experimentally measurable quantities, among which are d.c. conductivity for metals and quantized Hall conductivity for insulators. Then starting with Anderson orthogonality catastrophe (AOC), I will talk about the differences and relations between free and interacting Fermionic systems. At last, I will apply mean field theory to Landau Fermi-liquid theory with perfect nesting and show that spin density wave (SDW) state arises. The fluctuation of such a state could be described by non-linear sigma model.