Figure 17-6 Figure 17-6 Shows Two Different Compensation Schemes

question 241

Multiple Choice

Figure 17-6 Figure 17-6 shows two different compensation schemes for the Safelite Glass Corporation, an installer of auto glass windshields. Under Scheme I, the firm pays a consistent wage of $80 per day based on an 8-hour workday. Q_min represents the cut-off point under the hourly-wage system: if a worker installed fewer than Q_min windshields, the worker got fired. Scheme II represents a piece-rate scheme with an earnings floor: no worker would get less than $80 per day (for an 8-hour workday) and would have to produce at least Q_min. For any output level beyond Q* the worker earned an additional $20 for each unit produced.
-Refer to Figure 17-6.Suppose Q_min = 2 windshields and Q*=5 windshields.Under Scheme II,a worker has to install Q* windshields before she earns an additional $20 per windshield installed.What is a potential problem with this scheme?

• A) Workers might be more concerned with increasing output beyond Q* and less concerned with the quality of their work.
• B) Any increase in output between Q_min and Q* benefits the employer only.
• C) It violates labor laws because workers are not compensated for output between Q_min and Q*.
• D) Workers have no incentive to produce output to between Q_min and Q*.

Analyze contract case scenarios to determine legal outcomes and the existence of contractual obligations.

Understand the concept of executory contracts and their status within contract law.

Understand the concepts and defenses related to tort law.

Differentiate between criminal law and tort law.

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Definitions:

Transtheoretical Approach

A model that assesses an individual's readiness to act on a new healthier behavior, and provides strategies to guide the individual through the stages of change to action and maintenance.

Diffusion of Innovation

A theory that explains how, why, and at what rate new ideas and technology spread through cultures or social systems.

Field Theory

A psychological theory suggesting that human behavior is influenced by an individual's psychological environment, which consists of various dynamic interactions and forces.

Classic Change Model

A framework for understanding how individuals, groups, or organizations make significant changes through stages of precontemplation, contemplation, preparation, action, and maintenance.