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This lecture covers the representation and transformation of values in the L3 compiler, focusing on functions, tagged blocks, integers, characters, booleans, and unit values. It explains the process of closure conversion, introducing closures to represent functions with free variables. The lecture delves into the challenges of representing functions in functional languages, the introduction of closures, and the impact on function abstraction and application. It also discusses flat closures, recursive closures, and mutually-recursive closures, highlighting techniques to give closures access to themselves and each other. Additionally, it explores the closure conversion phase in the L3 compiler, detailing the handling of free variables, function definition, application, and testing primitives.