Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 24

Agricultural workers are often paid piece rates. For example, pear pickers are paid a fixed amount for each box of pears they pick. Pear companies, however, pay tree thinners on an hourly basis. These thinners remove excess fruit from trees so that the remaining fruit can grow larger. (Each piece of fruit must be at least six inches apart on the tree.) Why do you think these companies pay thinners by the hour Presumably, they would work harder if they were paid by the tree.