Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Employment - Growth, Informalisation and Other Issues

Question:

Suppose a farmer has four acres of land and he actually needs only two workers and himself to carryout various operations on his farm in a year. But if he employs five workers and also his family members, then this situation is know as :

Options:

Frictional unemployment

Seasonal unemployment

Voluntary unemployment

Disguised unemployment

Correct Answer:

Disguised unemployment

Explanation:

The correct answer is option (4) : Disguised unemployment

In disguised unemployment, more people are engaged in an activity than actually required. In this scenario, if a farmer employs more workers than necessary and their withdrawal does not affect the overall productivity, it indicates disguised unemployment. The presence of extra workers doesn't contribute significantly to the output, and removing them doesn't impact the farm's productivity. This type of unemployment is often found in agriculture, where the marginal productivity of additional workers is very low.

Frictional unemployment is temporary unemployment due to job seekers looking for a better fit or companies searching for the right candidate. It doesn't apply here as the farmer seems to have a readily available workforce (his family).

Seasonal unemployment occurs in sectors with seasonal variations in demand. This wouldn't apply unless there's a specific reason the additional workers are only needed during a particular time of the year.

Voluntary unemployment describes people who are choosing not to work actively. The family members' willingness to work suggests they're not voluntarily unemployed.