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

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*.