Why is economic valuation of family labour necessary in agriculture?
Answer and explanation
Correct answer: To estimate the actual cost of production and the family’s labour contribution
Family members contribute time and effort to farm work. Even when no cash wage is paid, this labour has an opportunity cost. Valuing it gives a realistic estimate of production cost, net income, and farm profitability. Treating family labour as free would understate cost and make profit appear artificially high. Exam tip: include both paid and unpaid labour when analysing farm costs.
Frequently asked questions
What is the correct answer to this question?
To estimate the actual cost of production and the family’s labour contribution
Why is this the correct answer?
Family members contribute time and effort to farm work. Even when no cash wage is paid, this labour has an opportunity cost. Valuing it gives a realistic estimate of production cost, net income, and farm profitability. Treating family labour as free would understate cost and make profit appear artificially high. Exam tip: include both paid and unpaid labour when analysing farm costs.
Which subject and chapter does this question cover?
This is a Class 11 Home Science question. Chapter: Work, Livelihood and Career. Topic: Traditional occupations in India - Agriculture.
