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The marginal productivity of labour force becomes zero in which of the following types of unemployment?
  • a)
    Disguised unemployment
  • b)
    Seasonal unemployment
  • c)
    Frictional unemployment
  • d)
    Structural unemployment
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The marginal productivity of labour force becomes zero in which of th...
  1. The term “marginal productivity” refers to the extra output gained by adding one unit of labor; all other inputs are held constant.
  2. Disguised Unemployment is a kind of unemployment in which there are people who are visibly employed but are actually unemployed. Disguised unemployment exists where part of the labor force is either left without work or is working in a redundant manner where additional worker's productivity is essentially zero. It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs. Hence option (a) is the correct answer.
  3. Suppose a farmer has four acres of land and he actually needs only two workers and himself to carry out various operations on his farm in a year, but if he employs five workers and his family members such as his wife and children, this situation is known as disguised unemployment.
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Most Upvoted Answer
The marginal productivity of labour force becomes zero in which of th...
Disguised unemployment:
Disguised unemployment refers to a situation where there are more workers engaged in a particular task than required. It is characterized by low productivity and underutilization of labor. In disguised unemployment, the marginal productivity of labor is zero because the additional laborers do not contribute to any additional output.

Explanation:
When there is disguised unemployment, it means that there are more workers employed in a task than necessary. This could be due to various reasons such as lack of alternative employment opportunities or lack of capital investment. As a result, the labor force is not fully utilized and there is underutilization of labor.

In such a situation, if one worker is removed from the task, the overall output will not be affected. This indicates that the marginal productivity of labor is zero. In other words, the additional worker does not contribute to any additional output, as the task can be easily completed by the existing workers.

For example, let's consider a scenario where a farmer needs only two workers to cultivate his land efficiently. However, he employs four workers for the same task. If two workers are removed, the output will remain the same, indicating that the marginal productivity of labor is zero.

In disguised unemployment, the excess labor is not contributing to any additional output. This type of unemployment is commonly found in the agricultural sector, where there is a surplus of labor, and the productivity of each worker is low.

Conclusion:
Disguised unemployment is characterized by underutilization of labor and low productivity. In this type of unemployment, the marginal productivity of labor becomes zero because the additional laborers do not contribute to any additional output. Removing one worker from the task does not affect the overall output, indicating that there is no marginal gain from employing additional labor.
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The marginal productivity of labour force becomes zero in which of the following types of unemployment?a)Disguised unemploymentb)Seasonal unemploymentc)Frictional unemploymentd)Structural unemploymentCorrect answer is option 'A'. Can you explain this answer?
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