Final answer:
The correct answer to the question of what type of system pays an employee for each unit of production is D. Piece-rate. This pay system allows employees to earn based on their productivity, leading to increased efficiency but potentially reducing the number of employees needed.
Step-by-step explanation:
A piece-rate system is a productivity-based system in which an employee is paid for each unit of production. The correct option is D. Piece-rate. Under such a system, an employee's earnings are directly tied to the amount of product they create or tasks they complete. This method is often used when work output can be easily measured.
In scenarios where a piece-rate pay system is implemented, a company may have an incentive to increase its investment in machinery, allowing workers to become more productive. This is because workers are able to produce more with the same amount of labor when working with more or better physical capital equipment. However, a consequence may be that the firm requires fewer employees due to the increased productivity of each worker.
Please provide the correct option which is D. Piece-rate, for the question regarding the type of system where employees are paid per unit of production.