Q.Distinguish between Open Unemployment and Disguised Unemployment (any three points).

Employing more people than a job requires is called disguised (under) unemployment, so the answer is option (d).

Disguised unemployment (also called under-employment) exists when more persons are engaged in an activity than are actually needed, so that the marginal productivity of the surplus workers is zero or negligible. If these extra workers are withdrawn, total output does not fall.

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Disguised unemployment -- where the marginal productivity of some workers is effectively zero because more people are engaged on a farm than are really required -- is the type of unemployment found specifically (and most prominently) in the agricultural sector in India.

Unlike open unemployment (where a person is clearly jobless and seeking work), disguised unemployment occurs when people appear to be employed -- they are visibly working -- but in reality the task could be performed just as efficiently by fewer people; if some of these 'extra' workers were withdrawn, total output would not fall, because their marginal product is zero (or even negative). This is a chronic feature of the Indian agricultural sector, where, because of the joint family system, lack of alternative non-farm employment, and population pressure on land, large numbers of family members remain engaged on small landholdings beyond what is actually required by the scale of operations. Disguised une …

Statement 1: False. Statement 2 (Or): True.

True or False 1: 'Disguised unemployment is observed in the industrial sector in India' — False. Disguised (or hidden) unemployment refers to a situation where more people are engaged in a job than are actually needed, so some workers contribute little or nothing extra to output (their marginal product is zero or near-zero) — if withdrawn, total output would not fall. This is overwhelmingly a feature of Indian agriculture, where family members work on small land holdings even though far fewer hands would produce the same output, not of the organised industrial sector.

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Lack of irrigation ties cultivation to a single rainy season, leaving farmers jobless the rest of the year - this is seasonal unemployment.

Seasonal unemployment arises when workers (typically in agriculture) are without work during certain months of the year because the nature of the activity does not require their labour then. Where irrigation facilities are absent, farmers depend entirely on rainfall and can grow only a single crop during the monsoon season, leaving them unemployed for the remaining months when the land cannot be cultivated. This is distinct from disguised unemployment (too many people working on a tas …

Disguised unemployment is defined by zero marginal productivity of the surplus labour, option (a).

Disguised unemployment is a hidden form of unemployment, common in Indian agriculture, where a piece of land is worked by far more people than are actually required to produce the given output. These extra workers appear to be 'employed' (they are present and engaged in the activity), but if any of them were withdrawn, total output on that land would NOT fall at all - meaning their contribution to output at the margin, i.e. their marginal productivity, is exactly ZERO. This distinguishes disguised unemployment from open unemployment (where a person has literally no work at all) - h …

Seasonal unemployment is most prevalent in the agricultural sector because farm work follows the crop cycle.

Seasonal unemployment occurs when a sector of the economy only offers work during specific seasons of the year, leaving workers unemployed in the off-season. This describes India's agricultural sector very closely: sowing and harvesting seasons require intense labour, but between these peak periods, especially during the dry/off-season or when crops don't need active tending, a large part of …

The Head Count Ratio method is used to count people below the poverty line; under disguised unemployment, marginal productivity of labour is zero.

Head Count Ratio method. The number (or proportion) of persons whose income/consumption expenditure falls below the official poverty line is counted using the Head Count Ratio method — it simply expresses the number of poor people as a ratio (or percentage) of the total population.

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