In discussing "output-based compensation schemes," such as piece-rate systems, Stanford economist Edward Lazear observed, "One major advantage of this approach isthat it accommodates a variety of worker preferences." But he also noted, "A disadvantage is that a pure piece-rate scheme makes the worker bear risk associated withvariations in. business conditions."Source: Edward P. Lazear, "Compensation and Incentives in the Workplace," Journal of Economic Perspectives, Vol. 32, No. 3, Summer 2018, pp. 195-214.a. What does Lazear mean by the first quote above? How do these compansation schemes accommodate different worker preferences? Preferences for whar?OA Piece-rate compensation can benefit both workers who have less ability as well as those who have greater abilityOB. Piece-rate pay can benefit workers who prefer to earn more income as well as those who prefer more leisure time.OC. A piece-rate system can benefit workers who prefer a slower work pace and those who prefer a faster work pace.OD. All of the above explain how piece-rate systems can accommodate a variety of worker preferences.b. What does Lazear mean by the second quote above? What are "business conditions"? How do they affect worker compensation when a firm is using a piece-catescheme?When business conditions are poor, workers will produceoutput. If they are paid a straight salary, their income willbut if they are on a piece-ratesystem, their incomes will likelyVrisk and their incomes areV stable than workers who are paid a straight salary.As a result, piece-rate workers often bear

Name: In discussing "output-based compensation schemes," such as piece-rate
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Description: In discussing "output-based compensation schemes," such as piece-rate systems, Stanford economist Edward Lazear observed, "One major advantage of this approach isthat it accommodates a variety of worker preferences." But he also noted, "A disadvanta