A large and important part of welfare economics can be pursued
at the engineering level. The present chapter gives a brief survey
of some of the well-known results concerning the 'optimal'
organization of production. The only value judgement required
in the analysis is that more of any output, or less of any input, is
cet. par. a good thing.

To emphasize that we are dealing with purely technological
relationships, we shall eschew the use of money. Costs, prices and

FIG. 1

productivities can be measured physically in terms of some
numéraire good. Generally, however, we shall speak of the mar-
ginal 'rate' at which one good can be transformed into another
--which is really just its 'opportunity cost' in terms of the good in
question.

When production is so organized that society cannot get more
of any one output without sacrificing other outputs or expending
additional inputs, and cannot use less of any one input without
using more of other inputs, or sacrificing outputs, we shall say
that it is organized optimally. Thus, in the simple two-commodity
worlds depicted in Figs. 1a and 1b, points like C are sub-optimal,

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