Comment on the following statemment using mathematical, statistical,
and graphical tools you need to support your arguments.  This is for a
health
economics class. : )

The smaller the amount of a negative externality produced, the more
efficient the economy.

Hi there,

Here are the results of our search:

Firstly, lets define what an "externality" and further a "negative"
externality actually are - a useful web-based slideshow is available
at the link below to clear this up (you'll only require the first few
slides).

http://www.humboldt.edu/~envecon/ppt/423/unit3a/index.htm

We can use a graphical tool here to show how the negative externality
affects the efficiency of the economy. Plot a graph with Price (X) and
Quantity (Y) along with supply and demand curves (if you're not
familiar with these, they are functions that track how many units of a
product are sold at any given price). In this context, they are called
marginal private cost (supply) and marginal private benefit (demand).
The intersection of these two lines is known as the equilibrium point.

Next we need to analyze the effect of a negative externality on this
initial model - there are two possible scenarios:

Scenario 1: This is a negative externality of production (so the
social cost of producing this product is higher than the private
cost).
In this case the MPC curve "shifts" left by the amount of the
externality. In doing so, the equilibrium point also changes,
resulting in a smaller total quantity. So the smaller the negative
externality, the more efficient the economy will be.

Scenario 2: This is a negative externality of consumption (so the
social cost of consuming this product is higher than actually buying
the product).
This time, the MPB curve "shifts" left by the amount of the
externality. In doing so, the equilibrium changes again, resulting in
a smaller total quantity. So the smaller the negative externality, the
more efficient the economy will be.

http://www.msu.edu/course/prm/255/ReducingNegativeExternalitySlideShow_files/frame.htm

More detailed and graphical information can be obtained at the link
above.

This outline is sufficient as an economic proof, so additional
mathematical or statistical tools are not necessary here.


Hope that helps!

answerguru

Just curious -- is this a homework assignment? If yes, has your professor
asked you to solicit others for opinions or are you attempting to get
somebody else to do your homework?

If you're really serious about getting an answer to this, perhaps you
could cite the texts and tools that have been made available to your class?
Which theorists have you studied?

/ephraim

ephraim,

It does indeed appear to be homework.  Dude, I didn't even do *my own*
homework for $7, I'm not going to do anyone else's for less than $50! 
;)