Economics • Economic BasicsMedium
How does the phenomenon of disguised unemployment manifest within the traditional agrarian framework of rural Haryana?
A. Marginal productivity of surplus family labor engaged in ancestral land plots approaches zero✓ Correct Answer
B. All rural workers migrate permanently to urban software parks within 24 hours of harvest
C. Farmers experience zero seasonal variation in labor demand throughout the entire calendar year
D. Wages for agricultural laborers automatically rise to match corporate sector salaries
💡 Solution & Explanation
Disguised unemployment occurs when additional workers on family farms add nothing to total output because their marginal productivity is zero, a common structural issue in densely populated rural agrarian societies. Removing these surplus workers would not reduce total agricultural production, pointing to the need for non-farm employment generation. Arthur Lewis conceptualized dual-sector models highlighting this transfer of surplus agrarian labor to modern industrial sectors.
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