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COASE THEOREM: A policy proposition, developed by Ronald Coase, that pollution and other externalities can be efficiently controlled through voluntary negotiations among the affected parties (polluters and those harmed by pollution). A key to the Coase theorem is that many pollution problems involve common-property goods that have no clear-cut ownership or property rights. With clear-cut property rights, "owners" would have the incentive to achieve an efficient level of pollution. This theorem states that it doesn't matter who receives the property rights, so long as someone does. Pollution can be reduced through voluntary negotiation by assigning private property rights to common-property resources. If common-property resources are privately owned, a market in property rights can be established. Owners then have the incentive to protect the quality of their resources.
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                           ACCOUNTING PROFIT: The difference between the revenue received by a firm and the explicit accounting cost incurred. This is the profit listed on a firm's balance sheet, appears periodically in the financial sector of the newspaper, and is reported to the Internal Revenue Service for tax purposes. While accounting profit is the "standard" designation of profit used in the business world, economists prefer to use economic profit More often than not, accounting profit differs from economic profit. In some cases, the two have almost no correlation. The reason rests with the difference between accounting cost and economic cost. Some accounting cost is not an opportunity cost and some opportunity cost is does not show up as an accounting cost.The primary difference between accounting profit and economic profit rests with normal profit. Normal profit is the profit a firm (that is, entrepreneurship) could receive in an alternative venture. Much like labor incurs an opportunity cost by producing one good rather than another, entrepreneurship foregoes the profit that could be earned in one activity when it undertakes another. For example, Phoebe Pankovic might be paid $10 an hour to produce Wacky Willy Stuffed Amigos (those cute and cuddly armadillos and tarantulas) to compensate for a $10 wage that could be earned producing Hot Momma Fudge Bananarama Ice Cream Sundaes. In a similar manner, William J. Wackowski, the entrepreneur who organizes the production of Wacky Willy Stuffed Amigos, foregoes profit that could be earned producing another good, such as Hot Momma Fudge Bananarama Ice Cream Sundaes. This foregone profit is an opportunity cost of entrepreneurship and is deducted from revenue to calculate economic profit. However, it is NOT deducted from revenue to calculate accounting profit.
Recommended Citation:ACCOUNTING PROFIT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: May 11, 2021].
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Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either decorative garden figurines or a wall poster commemorating last Friday (you know why). Be on the lookout for rusty deck screws.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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