CSEET · Economic and Business Environment · Indian Economy
In a village farm in Bihar, ten family members work on a small plot that could be cultivated with the same output by six members. Withdrawing the four extra members leaves total output unchanged. This situation illustrates:
This is disguised unemployment. Four of the ten workers add nothing to output, so removing them leaves production unchanged. Their marginal productivity is zero. It is common in Indian agriculture and differs from seasonal unemployment, which arises from off-season periods rather than surplus labour.
- ADisguised unemploymentCorrect
- BFrictional unemployment
- CCyclical unemployment
- DSeasonal unemployment
Explanation
Marginal productivity of the surplus four workers is zero, so output stays the same when they leave. That is the defining feature of disguised unemployment, common in Indian agriculture. Seasonal unemployment depends on the time of year, not on surplus labour with zero productivity.
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