Disguised unemployment, also known as hidden unemployment, occurs when labour is employed in a way that adds little or nothing to the total output of the economy. In situations of disguised unemployment (common in traditional agriculture in overpopulated regions), the marginal productivity of labour is zero. This means that if one or more workers are removed from the task or production process, the total output does not decrease, because those remaining can perform the same amount of work.
The marginal productivity of disguised unemployed workers is :
Asked in HPPSC HPAS Prelims 2024 · Topic: Nature of Indian Economy (Demographic Profile and its Economic Implications)
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