The correct option is 2 and 3 only.
Explanation
Disguised unemployment is a situation where more individuals are engaged in a specific job or sector than are actually required. It is a form of underemployment where the surplus labor contributes nothing to the total output.
Statement-wise Analysis:
- Statement 1 is Incorrect: In disguised unemployment, people are not visibly unemployed; rather, they appear to be employed. Visible unemployment refers to "Open Unemployment," where an individual is willing and able to work but cannot find a job. In disguised unemployment, the unemployment is hidden beneath the appearance of employment.
- Statement 2 is Correct: This phenomenon is most prevalent in the agricultural sector of developing economies like India. Due to the lack of alternative employment opportunities and the family-based nature of farming, more family members work on a piece of land than is necessary for optimal production.
- Statement 3 is Correct: The defining characteristic of disguised unemployment is that the marginal productivity of labor is zero. This means that the extra workers add no value to the total output. Consequently, if these surplus workers are removed from the sector, the total production remains unaffected.
Key Takeaway:
Disguised unemployment occurs when the marginal productivity of labor is zero, implying that the withdrawal of surplus labor does not reduce the aggregate output.