Crossword-Solution: SWF 3 letters, 40 clues 🏆 scrabble score: 9

The economy has exposed and sheltered sectors that produce output _yE _and _yS_, while a social welfare function (SWF) determines the optimal combination.

The SWF will here be a Constant Elasticity of Subsitution (CES) function that neglects the distribution of income: Output of the sectors is determined by production functions that depend upon the allocation of the labour factors_ h, m & l._ Since we will compare two regimes, one with _l_ and one without _l,_ this factor cannot be complementary (necessary), and hence it is substitutable to some degree with the other factors.

Figure 34 plots the production possibility curves and the SWF indifference maps of the two situations.

Such an institution, given its role in the co-ordination of economic policy, could be expected to do reseach on the national SWF.

Thus, a constitution can be seen as a mechanism that uses the population as input and generates a SWF that orders all elements in the commodity space.