MCQs · Q1
Q.A situation in which more workers are engaged on a farm than are actually needed, so that removing some of them would not reduce total output, is known as:
(a) Open unemployment
(b) Frictional unemployment
(c) Disguised unemployment
(d) Cyclical unemployment
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✓ Free question
Disguised unemployment describes a situation where the number of people engaged in an activity exceeds what is genuinely required to carry it out, so the marginal productivity of the extra workers is zero (or negative) even though each one appears occupied. Removing these extra workers would leave total output unchanged — the defining test of disguised unemployment.
Option-by-option analysis:
- (a) Open unemployment — incorrect; this describes people with no work at all, not people overcrowding an existing job.
- (b) Frictional unemployment — incorrect; this is a temporary job-search/transition gap, unrelated to overcrowding a task.
- (c) Disguised unemployment — correct; matches the marginal-productivity-is-zero description exactly.
- (d) Cyclical unemployment — incorrect; this arises from business-cycle downturns, not from too many workers on one task.
✓Final answer
Option (c) Disguised unemployment is correct.
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