This succinct manuscript has proven a workable mechanism in the classroom for providing students with a sound understanding of the economics toolkit. The focus is on developing the ability to apply economic reasoning to policy issues. The text can be completely read and understood in one term by the typical US college sophomore. Applications to straightforward policy issues are included throughout the text, including sections on applications in each chapter as well as chapters that deal strictly with critical policy issues. The text grew from a course in political economy stressing policy issues such as environmental regulation, taxes, price controls, electricity deregulation, free trade, antitrust, special interest politics, lobbying, and labor issues. It addresses policy issues with only the minimal sufficient economic theory. There is sufficient economic theory to give students solid grounding in principles while maintaining the focus on policy issues.