Question

Is it likely that workers under a​ piece-rate system will end up choosing to produce less than the minimum output required under the hourly wage​ system? Briefly explain. Switching to the​ piece-rate system​ (compared to the minimum output required under the hourly wage​ system) likely A. will result in workers producing less output because more productive workers will be attracted. B. will not result in workers producing less output because they will have less incentive to produce beyond the minimum level previously required. C. will result in workers producing more output because they will incur less risk. D. will not result in workers producing less output because more productive workers will be retained. E. will result in workers producing less output because more productive workers will quit and take jobs elsewhere.

Answer 1

Answer:D. Will not result in workers producing less output because more productive workers will be retained.

Explanation:

The piece rate system is production method which rewards workers based on the units of outputs produced while the hourly rate rewards workers based on the hour worked but with a minimum expected outputs.

The piece rate will lead to higher output for the reasons that more productive workers will be attracted, the incentive to produce will be higher, the higher the output the higher the wages, workers are not likely to quit though the risk is higher but more outputs will still be produced in pieces rate compared to hourly rate.