Economics traditionally has been defined by both its method and its subject matter. That is to say, there are economic methods – models and statistical tests based on a set of assumptions about the way people interact. In addition, there is an area of human life, which is hard to describe in a brief phase but is known to all economist, in which these methods are applied. We believe that the methods have a much wider scope than previously has been thought. Like the first two editions, this third edition attempts to introduce the student to the new work that has been done in applying economic methods to problems outside the traditional subject matter of economic study. This new field of research is, we think, more exciting, more interesting, and even more relevant than the more traditional applications to traditional economic problems.