Which of the following is false regarding Disguised unemploymenta)Marginal productivity of worker is highb)Mounting pressure of population in rural areas with no alternative employmentc)Feature of agrarian economyd)More people are engaged than requiredCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Disguised unemployment is a situation where more people are engaged in a particular activity than required. It is a common feature of agrarian economies where there is a lack of alternative employment opportunities. The following statement is false regarding disguised unemployment:

Marginal productivity of worker is high

Explanation:

Marginal productivity refers to the additional output produced by an additional unit of input. In the case of disguised unemployment, there are more workers engaged in a particular activity than required. This means that the marginal productivity of each worker is low, as there is not enough work to be done for everyone to be fully productive.

The other three statements are true regarding disguised unemployment:

Mounting pressure of population in rural areas with no alternative employment: In rural areas where there are limited employment opportunities, the population tends to grow faster than the available jobs. As a result, there is an excess supply of labor, and some people end up being engaged in activities where their contribution is not needed.

Feature of agrarian economy: Disguised unemployment is more prevalent in agrarian economies where the majority of the population is engaged in agriculture. Due to the limited productivity of agriculture, there is often not enough work to keep everyone fully employed.

More people are engaged than required: Disguised unemployment occurs when more people are engaged in a particular activity than required. This leads to low productivity and inefficiency as each worker is not fully utilized.

In conclusion, the marginal productivity of a worker is low in disguised unemployment, and the other three statements are true.

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