Consider the following statements regarding 'Disguised Unemployment': 1. It usually happens when people appear to be employed but their contribution to total output is zero. 2. It is most common in the urban industrial sector. 3. Removing the extra workers does not affect the productivity of the field. Which of the following statements are correct ?

The correct option is (c). Explanation Disguised unemployment is a situation where more individuals are engaged in a specific activity than are actually required. In economic terms, it is defined by a state where the marginal productivity of labor is zero. Statement-wise Analysis: - Statement 1 is Correct: In disguised unemployment, individuals appear to be employed because they are physically present and working. However, their contribution to the total output is nil. This means that the aggregate production does not increase with the addition of these workers. - Statement 2 is Incorrect: Disguised unemployment is a characteristic feature of the agricultural sector in developing economies like India, often driven by the joint family system and a lack of alternative job opportunities in other sectors. It is not the primary form of unemployment in the urban industrial sector, which typically faces open, structural, or frictional unemployment. - Statement 3 is Correct: Since the marginal productivity of the surplus workers is zero, their removal from the workforce does not affect the total volume of production. The output remains constant even if these extra workers are withdrawn. Key Takeaway: Disguised unemployment is predominantly found in the agricultural sector and is characterized by the fact that the marginal productivity of the additional labor force is zero.

NCERT Class 9 Economics — Chapter 2: People as Resource

mcqmedium

Consider the following statements regarding 'Disguised Unemployment':

It usually happens when people appear to be employed but their contribution to total output is zero.
It is most common in the urban industrial sector.
Removing the extra workers does not affect the productivity of the field.

Which of the following statements are correct ?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 2 only
B2 only
C1 and 3 only
D1, 2 and 3

Did you get this right?

Solution

The correct option is (c).

Explanation

Disguised unemployment is a situation where more individuals are engaged in a specific activity than are actually required. In economic terms, it is defined by a state where the marginal productivity of labor is zero.

Statement-wise Analysis:

Statement 1 is Correct: In disguised unemployment, individuals appear to be employed because they are physically present and working. However, their contribution to the total output is nil. This means that the aggregate production does not increase with the addition of these workers.
Statement 2 is Incorrect: Disguised unemployment is a characteristic feature of the agricultural sector in developing economies like India, often driven by the joint family system and a lack of alternative job opportunities in other sectors. It is not the primary form of unemployment in the urban industrial sector, which typically faces open, structural, or frictional unemployment.
Statement 3 is Correct: Since the marginal productivity of the surplus workers is zero, their removal from the workforce does not affect the total volume of production. The output remains constant even if these extra workers are withdrawn.

Key Takeaway:

Disguised unemployment is predominantly found in the agricultural sector and is characterized by the fact that the marginal productivity of the additional labor force is zero.

Your note

More from Chapter 2: People as Resource

Consider the following statements regarding 'Human Capital': 1. Human capital refers solely to the physical strength of the population. 2. Investment in human capital yields a return just like investment in physical capital. 3. It is considered superior to other resources like land and physical capital because it can make use of them. Which of the following statements are correct ?

medium

With reference to the classification of economic activities, consider the following 1. Mining and quarrying are classified under the primary sector. 2. Transport and communication are considered part of the primary sector. 3. Activities in the primary sector do not contribute to the national income. Which of the following statements are correct ?

medium

Consider the following statements regarding 'Market' and 'Non-Market' activities: 1. Market activities involve remuneration to anyone who performs the activity for pay or profit. 2. Government services are excluded from market activities. 3. Non-market activities are primarily for self-consumption and processing of primary products. Which of the following statements are correct ?

medium

Which of the following best describes the 'Virtuous Cycle' of human capital formation?

easy

Consider the following statements regarding the 'Sarva Shiksha Abhiyan': 1. It is a significant step towards providing elementary education to all children. 2. It focuses exclusively on higher education in universities. 3. It is a scheme implemented only in metropolitan cities. Which of the following statements are correct ?

medium

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The correct option is (c).

Explanation

Statement-wise Analysis:

Statement 1 is Correct: In disguised unemployment, individuals appear to be employed because they are physically present and working. However, their contribution to the total output is nil. This means that the aggregate production does not increase with the addition of these workers.
Statement 2 is Incorrect: Disguised unemployment is a characteristic feature of the agricultural sector in developing economies like India, often driven by the joint family system and a lack of alternative job opportunities in other sectors. It is not the primary form of unemployment in the urban industrial sector, which typically faces open, structural, or frictional unemployment.
Statement 3 is Correct: Since the marginal productivity of the surplus workers is zero, their removal from the workforce does not affect the total volume of production. The output remains constant even if these extra workers are withdrawn.

Key Takeaway:

Disguised unemployment is predominantly found in the agricultural sector and is characterized by the fact that the marginal productivity of the additional labor force is zero.