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CA Foundation · Business Economics · Indian Economy

A graduate in a village works on the family farm throughout the year, but if she withdrew, the farm's total output would remain unchanged because other family members already do the necessary work. Her situation is best described as:

It is disguised unemployment. She seems employed, but her marginal productivity is zero because output stays the same if she leaves. This is common in Indian agriculture with surplus family labour. It differs from seasonal, frictional or cyclical unemployment, which involve idleness or job transitions.

  1. ADisguised unemploymentCorrect
  2. BCyclical unemployment
  3. CFrictional unemployment
  4. DSeasonal unemployment

Explanation

Disguised unemployment exists when people appear employed but their marginal productivity is zero, so removing them does not reduce output. Seasonal unemployment arises from off-season idleness, frictional from job switching, and cyclical from downturns. Here she works all year with zero marginal contribution.

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