Who Benefits From The Mortgage Interest Deduction? (Case Study Sample)

Case Studies 1, 7, and 12
Chapter 1: Cow Power
1. Based on the information given in the case, the out of pocket costs of producing
Electricity from cow manure is greater than the out of pocket costs of conventional
power source This is because the capital outlay using renewable resources such as
cow power and windmills is greater than the capital outlay of conventional power
source, but the cost of using renewable power sources becomes cheaper each month as the only cost of using the renewable resource is in the capital outlay.
* The marginal cost of manure is the additional cost of producing an additional unit of manure.
* The marginal cost of converting to methane is the additional cost of conversion to manure.
2. The anaerobic digestion of cow manure increases the opportunity cost of producing cow power. These benefits mean that the net opportunity cost of producing cow power is less than the out of pocket costs.
3. Based on the information in the case, the growth of the cow power industry illustrates the principle of spontaneous order as well as hierarchy. It was initiated by ordinary citizens, Mary and Earl who initiated the project in an attempt to solve the solution of the cow manure that was collected on their dairy farm. Moreover, the fact that it was initiated by Mary and Earl is spontaneous. It is also hierarchy due to the fact that the government is taking part in the projects that are to be implemented.
Chapter 7:
Black Run at Northern Rock: First Domino of the global financial crisis.
1. The major banking risk that was involved in the failure of Northern Rock, was the
liquidity risk because their deposit base was smaller when compared to other
institutions and only amounted to 25% of their asset base. Based on the information
on the case, credit risk also applied as short-term borrowings contributed a higher
than the normal share of the liabilities and market risk also applied as they approved
home loans that exceeded the market value of the house.
2. The tools used by government to ensure the safety and stability of the banking system that are illustrated in this case include the fact that depositors were able to withdraw their deposits when they felt that they were no longer earning interest or profit for them.
3. In my opinion the British government attempted to save Northern Rock and thereafter nationalized the bank because the government could not allow the bank allow depositors to withdraw deposits as Northern Rock was the 5th largest lender and this event took p...