In this short paper I will be outlining the Positive externalities that come from the advancement and development of replacement limbs over the past 14 years of war. With every war a positive outcome is always medical knowledge due to the absolute need to correct injuries usually not seen in the civilian world. “For decades, a soldier's lost limb meant a life confined to a wheelchair or crutches and at the very least a discharge from active service. But an increasing number of injuries in the Iraq and Afghanistan wars, while horrific, have led by necessity to advancements in prosthetics technology. In fact, some amputee service members have been able to remain on active duty, thanks to the experience earned by their doctors.” (Koebler, 2012). This particular data will focus on the Armies data as they are the largest ground force in both recent wars. “According to the Army, at least 167 soldiers who have had a major limb amputation (complete loss of an arm, leg, hand, or foot) have remained on active duty since the start of the Afghanistan and Iraq wars” (Koebler, 2012). I have personally seen at least 2 of these individuals in my time in service able to perform their duties without a hitch due to prosthesis. Movements are not stiff or rigid as they used to be more of a placeholder then anything useful. “Kevin Carroll, vice president of Prosthetics at Hanger, a company that makes artificial limbs, says prosthetics have become more comfortable to wear and closer in range of motion to natural limbs.” (Koebler, 2012)” He also states "Unfortunately, when you have war, you have casualties, but with that comes innovation," As a medic we are taught this early on, our work is important and that every life we save will work towards saving many others through advancement in technology. This can be seen as a positive externality from a negative situation as injury leads to innovation and in turn helps lives and retaining of employment. “An externality arises when a person engages in an activity that influences the well-being of a bystander but neither pays nor receives compensation for that effect” (Mankiw). Civilians have been able to reap the benefit of the Militaries advancement of prosthetics in such examples of those who lost limbs due to the Boston Marathon bombing or recently a double amputee from South Africa who is prospected to attend the Olympics. “ Carroll says there's a "very bright future" for powered prosthetics that allow soldiers to lift extremely heavy objects with little effort. He points to Oscar Pistorius, the South African, double-amputee sprinter who will likely participate at the Olympics this summer.” (Koebler, 2012) Also the advancement as stated will ultimately reach a point where the replacement limb is seen as an upgrade rather than a second option. Again both examples of positive externalities. Next I will look into the cost of Prosthetics, government spending, and the issues still being faced as the technology is rising. Prosthetics today cost several thousands of dollars and the usability is hit or miss with many soldiers citing lower limb amputations have more advanced technology then arms. This next article follows the life of a retired Vet Mike Kacer and how he lives day to day with the artificial arms supplied to him from the VA. “Even though the government has probably spent more than $117,000 to provide him with artificial arms over the past five years. Just one of the more sophisticated devices he owns cost more than $100,000, and it's a device he doesn't often use.” (Martino, 2014). “In other words, soldiers who lost legs adjusted better than those who lost arms. Scientists have greatly improved prosthetic legs during the past decade with better technology, materials like carbon fiber and urethane, and rehabilitation. Improvements to artificial arms have not kept pace, according to many specialists. "The state of the art of upper limb technology is not as good as lower limb technology," said Dr. Linda Resnik, a Brown University scientist who works at the VA Medical Center in Providence, Rhode Island.” (Martino, 2014). So right now the cost spent on prosthetic arms by the VA is not meeting the value to the soldiers with the injuries. Where-as the cost spent by the VA on prosthetic legs has a high value to those in need of the prostheses. This is bad for the Government’s cost on arm prostheses as the price is very inelastic and very expensive. Ch.5 “A measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price” (Mankiw)ch.5 “But in the last fiscal year, the VA's Prosthetic and Sensory Aids Service spent $70.2 million went for artificial legs, while just $5.9 million was allocated for prosthetic arms.” This shows the demand for lower half prosthesis and the money put into it far outweighs that of arm prosthesis. Giving Lower prosthetics a high demand curve due to the increase in technology allocated to that area. In order for there to be a raise in arm prosthesis demand we need to focus more spending and research to make the users happy. Also as battlefield medicine advances so does the demand as many soldiers that would have died from such injuries in previous wars are surviving today “Confounding slow progress is rising expectations. In the Vietnam era, soldiers died on the battlefield from injuries that are treatable today. Survivors who made it home were not given many choices for prosthetics, said Lynne McFarland, an epidemiologist with the VA in Washington State. "When they were injured there wasn't a lot of research on upper limb prosthetics," she said. "It was basically the kind of hook and grasper thing that was available to them." (Martino, 2014). This also shifts the demand curve stressing the producers to push out supply. The ending argument is the technology for Arm replacements is just not where it needs to be yet. Martino interviews another vet, multiple amputees John E. Masson, who has lost one arm and both legs and he states "I'd rather lose a leg than lose an arm." And scientists working in this field also stated “Robotic motors can grasp everyday objects. But they are unable to feel what they are doing. Scientists call this a feedback loop: Those who have their natural arms use their muscles and nerves to work together. In artificial arms, that's missing. Berke said, "There's no feedback from the hand to the limb, so people can't say, 'Yes I have a grip on my cup of coffee and I'm not going to smash it.' " (Martino, 2014) this one major difference between the usability of upper and lower prosthetics is key to reducing the spending in the future.