Consider the following statements regarding 'Disguised Unemployment': 1. It implies that more people are engaged in a work than required. 2. If a few people are removed, production will fall. 3. It is a form of underemployment. Which of the following statements are correct ?

The correct option is (c). Explanation Disguised unemployment is a phenomenon where more people are employed in an activity than are actually needed for its efficient execution. It is characterized by a situation where the marginal productivity of surplus labor is zero. Statement-wise Analysis: - Statement 1 is Correct: Disguised unemployment implies that the number of people engaged in a job exceeds the number required to perform it. This is most commonly observed in the agricultural sector in developing economies, where entire families work on a single plot of land regardless of the actual labor requirement. - Statement 2 is Incorrect: A defining feature of disguised unemployment is that the marginal productivity of the additional workers is zero. Consequently, if these surplus workers are withdrawn or removed from the activity, the total output or production remains unchanged, rather than falling. - Statement 3 is Correct: It is considered a form of underemployment because the workers are not utilizing their full potential or skills. While they appear to be employed, their contribution to the total output is negligible, meaning they are effectively under-utilized. Key Takeaway: In disguised unemployment, the marginal productivity of labor is zero; therefore, the removal of surplus labor does not affect the aggregate output.

NCERT Class 9 Economics — Chapter 2: People as Resource

mcqmedium

Consider the following statements regarding 'Disguised Unemployment':

It implies that more people are engaged in a work than required.
If a few people are removed, production will fall.
It is a form of underemployment.

Which of the following statements are correct ?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 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 phenomenon where more people are employed in an activity than are actually needed for its efficient execution. It is characterized by a situation where the marginal productivity of surplus labor is zero.

Statement-wise Analysis:

Statement 1 is Correct: Disguised unemployment implies that the number of people engaged in a job exceeds the number required to perform it. This is most commonly observed in the agricultural sector in developing economies, where entire families work on a single plot of land regardless of the actual labor requirement.
Statement 2 is Incorrect: A defining feature of disguised unemployment is that the marginal productivity of the additional workers is zero. Consequently, if these surplus workers are withdrawn or removed from the activity, the total output or production remains unchanged, rather than falling.
Statement 3 is Correct: It is considered a form of underemployment because the workers are not utilizing their full potential or skills. While they appear to be employed, their contribution to the total output is negligible, meaning they are effectively under-utilized.

Key Takeaway: In disguised unemployment, the marginal productivity of labor is zero; therefore, the removal of surplus labor does not affect the aggregate output.

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 ?

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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 ?

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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 ?

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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 ?

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The correct option is (c).

Explanation

Statement-wise Analysis:

Statement 1 is Correct: Disguised unemployment implies that the number of people engaged in a job exceeds the number required to perform it. This is most commonly observed in the agricultural sector in developing economies, where entire families work on a single plot of land regardless of the actual labor requirement.
Statement 2 is Incorrect: A defining feature of disguised unemployment is that the marginal productivity of the additional workers is zero. Consequently, if these surplus workers are withdrawn or removed from the activity, the total output or production remains unchanged, rather than falling.
Statement 3 is Correct: It is considered a form of underemployment because the workers are not utilizing their full potential or skills. While they appear to be employed, their contribution to the total output is negligible, meaning they are effectively under-utilized.

Key Takeaway: In disguised unemployment, the marginal productivity of labor is zero; therefore, the removal of surplus labor does not affect the aggregate output.