Gulshan owns three acres of land. Four people can cultivate that land well but eight members of Gulshan's family are cultivating on this land. What is this situation called in Economics?
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The situation referred in the context in economics is known as the disguised employment.
- Disguised unemployment represents a sort of unemployment in which people are clearly working but are in fact unemployed. It is also known as the hidden unemployment.
- In such a scenario, additional individuals are typically involved in a specific job then is truly necessary.
- This type of employment is present in rural areas in agricultural practices.
- Similarly, in Gulshan's land, only 4 can people but 8 are working. The other 4 people are facing disguised employment.
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Explanation:
The situation given in question statement can be defined in two economic perspectives;
Excess Capacity of resources
In this situation, the company is producing at a lower scale of output or at more operational cost than its benchmarking standard. In given case, it will be due to excess of resources.
Disguised unemployment
It is a situation where more than sufficient people are engaged in working, and not all the employees are fully occupied in working. This is also termed as hidden unemplyment
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