McqMate
| Q. |
Indian agriculture is typically characterised as - |
| A. | land surplus, labour scarce economy |
| B. | land surplus, labour surplus economy |
| C. | land scarce, labour surplus economy |
| D. | land scarce, labour scarce economy |
| Answer» C. land scarce, labour surplus economy | |
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Explanation: The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. Most of the East Asian economies such as Japan, South Korea, and Taiwan are similar to India in being land scarce and labor surplus. |
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