Question

Which of the following conditions characterizes disguised unemployment?

• A. When the marginal productivity of labour is greater than one
• B. When the marginal productivity of labour is zero
• C. When the marginal productivity of labour is greater than two
• D. When the marginal productivity of labour is greater than one and less than two

Hint:

Disguised unemployment is a form of hidden unemployment where more people are employed than necessary.for the task at hand, resulting in wasted resources.

Answer 1

The Correct Option is B

Disguised unemployment exists when more workers are employed, yet their contribution to output is zero (zero marginal productivity). It frequently appears in sectors with surplus labor.