Question

An employment situation where the marginal productivity of agricultural labour is zero is known as:

• A. Seasonal unemployment
• B. Cyclical unemployment
• C. Disguised unemployment
• D. Disguised employment

Hint:

The worker is present and occupied every day, but adds nothing extra to total output, that hidden zero contribution is the clue.

Answer 1

The Correct Option is D

Concept:
Labour economics distinguishes several kinds of joblessness by cause and appearance: seasonal, cyclical, and situations where a worker looks employed but adds nothing to output. India's agriculture sector, with far more family workers on a farm than the land actually needs, is the textbook setting for this last case.

Explanation:
Seasonal unemployment happens only in certain months of the year, for example farm labourers with no work between harvest and the next sowing season, so it does not fit a description of a permanent, year round condition tied to marginal productivity. Cyclical unemployment tracks the ups and downs of the broader economy, like job losses during a recession, and again has nothing to do with a fixed zero marginal product in agriculture. Where several family members work the same small plot of land, removing one or two of them would not reduce total output at all, since their marginal productivity is already zero, they are adding no extra produce even though they show up and work every day. This precise state, where a worker is present and occupied but contributes zero extra output, is termed disguised employment: the person is technically employed, holding a job and putting in labour, yet the employment itself is a disguise for what is really surplus, unproductive labour. Disguised unemployment is the closely related but broader idea used to describe this overall phenomenon of hidden surplus labour in agrarian economies, while disguised employment more precisely names the zero-marginal-product state of the individual worker described in this question.

Final Answer:
The situation of zero marginal productivity in agricultural labour is termed disguised employment, so option D is correct.