Figure 18-3 shows two different compensation schemes for the Youness Corporation, an installer of auto glass windshields. Under Scheme I, the firm pays a consistent daily wage of $80 per day based on an 8-hour workday. Q Min in represents the cut-off point under the hourly-wage system: if a worker installed fewer than Q Min in 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 in. For any output level beyond Q* the worker earned an additional $20 for each unit produced.
-Refer to Figure 18 -2. Panel D is appropriate when used to represent

Question

Figure 18-3 shows two different compensation schemes for the Youness Corporation, an installer of auto glass windshields. Under Scheme I, the firm pays a consistent daily wage of $80 per day based on an 8-hour workday. Q Min  in represents the cut-off point under the hourly-wage system: if a worker installed fewer than Q Min  in 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  in. For any output level beyond Q* the worker earned an additional $20 for each unit produced.
-Refer to Figure 18 -2. Panel D is appropriate when used to represent

Quizplus · Accepted Answer

The labor supply curve facing an input price taker is represented by Panel D because it shows the relationship between the wage rate and the quantity of labor supplied.

Figure 18-3 Shows Two Different Compensation Schemes for the Youness