Question 3 A landlord leases land to a tenant. The tenant can carry out production by using one of the two production techniques: 1 or 2. Any technique results in one of the two outcomes: good or bad. The choice of techniques by the tenant is not observed by the landlord. The two techniques are summarized as follows: Technique cost for probability of probability of return at return at tenant good outcome bad outcome good outcome bad outcome technique 1 300 3/7 4/7 260 0 technique 2 150 1/3 2/3 1086 0 Consider a fixed rental contract with rent R = 378. Under this contract, the tenant has to pay rent 378 to the landlord under good outcome. Under bad outcome, the tenant pays nothing due to limited liability. (a) [5 points] Determine the technique the tenant will choose under the fixed rental contract R = 378. (b) [6 points ] Consider a share contract s where 0