Question
In case of disguised unemployment, which of the following will hold true
Select the correct answer using the code given below:
- Marginal productivity of capital will be zero
- Productivity of labour will be less
Select the correct answer using the code given below:
Answer: Option C
Answer: (c)
Disguised unemployment arises because more labourers work in the factory/land than are required. And hence productivity
i.e. production per unit of labour will be less. So, (ii) statement is correct.
In such a case, if we add more capital then production may increase but if we add more labour then production will not increase.
So, Marginal Productivity of capital = $\text"change in production"/\text"change in capital"$ will be positive
But, Marginal Productivity of labour = $\text"change in production"/\text" change in labour"$ will be zero
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Answer: (c)
Disguised unemployment arises because more labourers work in the factory/land than are required. And hence productivity
i.e. production per unit of labour will be less. So, (ii) statement is correct.
In such a case, if we add more capital then production may increase but if we add more labour then production will not increase.
So, Marginal Productivity of capital = $\text"change in production"/\text"change in capital"$ will be positive
But, Marginal Productivity of labour = $\text"change in production"/\text" change in labour"$ will be zero
Was this answer helpful ?
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