This paper develops a concept of educational adequacy linked to the economic model of the education production function. A production model standard of adequacy in financing education requires a specific and stable definition of adequate educational outcomes, an improved understanding of the relationship between school resources and educational outcomes (necessitating research at the microeducational level of student-school interaction), and a means of optimizing the resource mix within the constraints of resource availability. The author argues that since attempts to establish adequacy either by standardizing inputs or by establishing standardized output goals are unworkable, adequacy may best be defined in terms of educational process standards. Under such an approach, based on a "social minimum" model rather than on ideals of educational equality, a universally adequate process would be defined and its financing mandated despite the recognition that the costs and results might vary from location to location. The author considers the practical and political problems associated with implementing such an approach, then concludes with an exploration of several specific issues affecting the definition and implementation of adequacy standards in education and educational financing. (Author/PGD)