If It Is Difficult for a Firm to Attribute the Output

question 124

Multiple Choice

If it is difficult for a firm to attribute the output it produces to a particular worker, then

• A)its employees are likely to form a union.
• B)a commission system of compensation will be preferable to a salary system.
• C)a salary compensation system will be preferable to a commission system.
• D)a piece-rate system of compensation will be preferable to a salary system.

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Definitions:

Wage Rate

The amount of compensation a worker receives per unit of time or per unit of output.

MRP

Material Requirements Planning is a system for planning production schedules and inventory needs.

Marginal Revenue Product

The additional income generated from using one more unit of a resource, used in economics to determine the optimal level of resource employment.

Profit-maximizing

A business strategy aimed at achieving the highest possible profit through adjusting production levels, pricing, or other operational methods.