Correct option is B
The correct answer is: (B) When the marginal productivity of labour is zero.
Explanation:
Disguised unemployment refers to a situation where more people are employed than actually needed, and the extra workers contribute nothing to total output. This condition is most commonly seen in the agriculture sector in developing countries.
Disguised unemployment refers to a situation where more people are employed than actually needed, and the extra workers contribute nothing to total output. This condition is most commonly seen in the agriculture sector in developing countries.
In such cases, the marginal productivity of surplus labour becomes zero, meaning even if those extra workers are removed, total production remains unchanged.
Information Key Points:
It typically occurs in family-run farms or informal sectors.
Marginal productivity = 0 means the worker adds no additional output.
It is a qualitative problem, not always visible in employment statistics.
Knowledge Booster:
When the marginal productivity of labour is greater than one: This means each additional worker adds significantly to output. It reflects productive employment.
When the marginal productivity of labour is greater than two: Even higher productivity per worker.
When the marginal productivity of labour is greater than one and less than two: it shows positive contribution, though moderate .
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