MICROECONOMICS CH : 7 PRODUCTION FUNTION AND RETURNS TO A FACTOR — Economics STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 7 PRODUCTION FUNTION AND RETURNS TO A FACTOR2 Marks
Question
When diminishing returns are reversed through mechanisation in agriculture, how does it impact the employment of labour?
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Answer
Mechanisation implies the use of capital (machinery) in place of labour. It raises productivity of labour, of course. But, leads to the emergence of surplus labour-a situation of unemployment.
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