You are a factory owner and have given employment to 400 workers. If 10 workers are retrenched by you without loss of production then this situation will be described as:a)Open Unemploymentb)Disguised Unemploymentc)Frictional Unemploymentd)Seasonal UnemploymentCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Explanation:

Disguised Unemployment:
Disguised unemployment refers to a situation where there are more workers engaged in a particular activity than required. In other words, it is a type of unemployment where the number of workers is higher than the actual requirement for a particular job or industry, resulting in no loss of production even if some workers are retrenched.

Explanation of the given situation:
In the given situation, the factory owner has employed 400 workers. However, it is mentioned that if 10 workers are retrenched, there will be no loss of production. This indicates that the current workforce is more than what is required for the factory's production level.

Identification of the type of unemployment:
Based on the given situation, the type of unemployment described is disguised unemployment. This is because even if some workers are retrenched, the production level remains unchanged, indicating that there are surplus workers in the factory who are not contributing significantly to the overall production.

Reason behind disguised unemployment:
Disguised unemployment can occur in industries or sectors where the productivity of labor is low, and the work is not fully utilized. It often arises in traditional or subsistence sectors where the workforce is engaged in activities that do not require their full potential.

Impact of disguised unemployment:
Disguised unemployment is considered inefficient as it leads to underutilization of human resources. The presence of surplus workers reduces the overall productivity and efficiency of the workforce. It also indicates a lack of job opportunities in the economy, as more workers are engaged in a particular activity than required.

Conclusion:
In conclusion, the situation described in the question where 10 workers can be retrenched without affecting the production level is an example of disguised unemployment. It highlights the presence of excess or surplus workers in the factory, indicating a need for better workforce planning and utilization of resources.

Answer

In this case those 10 worker's are not contributing to the total product(i.e,. MP=0).This is known as DISGUISED UNEMPLOYMENT

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