Disguised unemployment generally refers to a situation in which which of the following statements about labour productivity is true?

Introduction / Context:
Disguised unemployment is a concept widely discussed in the context of developing economies, including India. It describes a situation where more people are employed in a job than are actually needed to produce a given level of output. Although these people appear employed, their contribution to output is negligible or zero. Understanding this concept is important in development economics and labour economics, and exam questions often require you to connect disguised unemployment with marginal productivity of labour.

Given Data / Assumptions:
• The question is about the general meaning of disguised unemployment. • Several statements describe different situations related to unemployment and labour productivity. • We are asked to identify which statement correctly captures the essence of disguised unemployment. • The context is usually rural or informal sectors where surplus labour is common.

Concept / Approach:
Disguised unemployment exists when a part of the labour force is employed but its marginal productivity is zero or extremely close to zero. If these workers were removed from the job, total output would remain unchanged. This is different from open unemployment, where people are visibly without jobs. It is also different from low productivity, where workers contribute something but at a low level. The classic example in Indian context is a small plot of land cultivated by many family members; if some of them leave for other work, farm output does not fall.

Step-by-Step Solution:
Step 1: Look for the statement that refers directly to marginal productivity of labour, because disguised unemployment is closely linked with this concept. Step 2: Recognise that disguised unemployment is not primarily about a large number of people being openly unemployed; rather, they are apparently employed. Step 3: Observe that the key feature is that some workers do not add to total output, so their marginal productivity is zero. Step 4: Note that the absence of alternative employment is not part of the strict definition of disguised unemployment, although it may be true in some situations. Step 5: Distinguish between low but positive productivity and zero marginal productivity; disguised unemployment refers to the latter situation. Step 6: Conclude that the statement that marginal productivity of some labour is zero is the one that correctly reflects disguised unemployment.

Verification / Alternative check:
Consider a small farm where six family members work on tasks that can easily be handled by three people. If three of them migrated to a town and took up non farm jobs, the farm output would remain almost the same because the remaining three workers can still perform all necessary tasks. This means the marginal productivity of the extra three workers was zero, even though they were counted as employed. This is exactly what economists refer to as disguised unemployment. This simple example confirms that zero marginal productivity is the key feature.

Why Other Options Are Wrong:
The statement about a large number of people remaining openly unemployed describes open unemployment, not disguised unemployment, because disguised unemployment workers are technically employed in some activity.

The statement that alternative employment is not available focuses on job opportunities rather than on the productivity of those already employed, so it does not capture the essence of disguised unemployment.

The statement that productivity of workers is low but still positive does not match the strict definition, which emphasises zero marginal productivity for some part of the labour force.

Common Pitfalls:
A common pitfall is to equate disguised unemployment with any situation where wages are low or where people are underemployed in terms of hours. While these can be related issues, the technical definition relies on the concept of marginal productivity being zero. Another mistake is to mix up disguised unemployment with structural or cyclical unemployment in theoretical discussions. Keeping in mind the specific example of surplus labour in agriculture or informal family enterprises helps in understanding and remembering the correct description.

Final Answer:
Disguised unemployment generally refers to a situation where the marginal productivity of some labour is effectively zero.