This title aims to show how microeconomics should be used in the analysis of public policy problems. It provides a way to learn microeconomics, motivated by its application to important, real-world issues. Lee Friedman offers the microeconomic tools necessary to understand policy analysis of a range of public concerns - including the California electricity crisis, welfare reform, public school finance, global warming, health insurance, day care, tax policies, college loans and mass transit pricing. These issues are scrutinised through microeconomic models that identify policy strengths, weaknesses and ideas for improvements. The book has two complementary goals. One is to develop skills of economic policy analysis: to design, predict the effects of and evaluate public policies. The other is to develop a deep understanding of microeconomics as an analytic tool for application - its strengths and extensions into such advanced technologies as general equilibrium models and pricing methods for natural monopolies and its weaknesses, such as behavioural inconsistencies with utility-maximalization models and its limits in comparing institutional alternatives.