Disguised Unemployment Definition

Disguised unemployment (also called hidden unemployment) occurs when more workers are employed than needed to produce the same output; it is characteristic of agricultural economies and unorganized sectors. The defining feature is that the marginal productivity of labour (additional output produced by one more worker) is zero or near-zero, meaning some workers contribute nothing to total output and could be removed without affecting production. Option (a) describes open unemployment, option (b) is general joblessness, and option (d) is low productivity but not necessarily disguised unemployment. > Disguised unemployment = Marginal productivity of labour = zero (worker adds nothing to output). Answer: (c).