In the real world the inputs may well be distributed unequally among the households in a community. For simplicity of exposition, assume that the households can be classified into two polar classes: owners of land and owners of labor. Then, in addition to the collective arrangement , three basic types of arrangements can exist between the owners of land and the owners of labor: fixed wage, fixed rent , or share contracts. An owner of land can rent the land out to an owner of labor at a fixed rent (the fixed rent contract) , lease it out for a share of output (the share contract) , or hold it but hire labor at a fixed wage rate (the wage contract)