An Analysis for Cobb-Douglas Production Function, the Capability Proxies, Net Society Value and Technology Indicator

Abstract

This paper establishes an estimate system and forms the capability proxy, the technology capability proxy and the total net society value, etc. and demonstrates the progress of technology can make the capability increase and finds that the technology capability is mainly decided by the ability of the scientists and engineers. The paper completely analyzes the Cobb-Douglas production function and first make out how does it be formed theoretically, what is the ????, ????, why ???? + ???? equals one and demonstrate that in the profitmaximizing condition the excess profit is not necessarily to be zero and there is a bias when we apply of the Cobb-Douglas production function to measure both the capability and the technology.