THE CLASSICAL THEORY CONSIDER TWO commodities, (0) and (1), the first being denoted as money, and the other being for the sake of representation identified with a certain kind of bills, say payable 20 years hence. By a possible contract (x, y), we shall mean that A buys the amount x of bills from B, paying for it in money y units, the price being p = y/x. In the special case which we shall use as an illustration, we may put