If an employee is paid a fixed wage in a production environment where the wage is independent of output,then the employee has an incentive to:
A)maximize output.
B)shirk.
C)innovate.
D)search for methods to overcome random elements in production.

Question

Quizplus · Accepted Answer

Since the employee's wage is independent of output, there is no direct incentive to work harder or increase productivity. Therefore, the employee may choose to shirk or work at a lower level of output since the wage will remain fixed regardless of the level of effort.

If an Employee Is Paid a Fixed Wage in a Production