economics medium MCQ

In the case of 'disguised unemployment', the marginal productivity of labor is:

  1. Highly positive
  2. Zero or negative
  3. Equal to average productivity
  4. Infinite

Answer: Zero or negative

Disguised unemployment occurs when more people are employed than actually needed for a job, commonly seen in the Indian agricultural sector. If these extra workers are removed, the total output remains unaffected, meaning their marginal productivity is zero.

Topic Macroeconomics - Unemployment
Exam Relevance UPSC Prelims, SSC CGL, Railway
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