Classification Subject Subject in Charge The Field of Economic Theory & History of Economics Independent Study in Applied Microeconomics Moriki Hosoe The objective of this study is to introduce law and economics approaches to law analysis. Law and economics is one of the fastest-growing areas of applied microeconomics. It uses the standard microeconomic tools and concepts of scarcity, choice, preferences, incentives, supply and demand. This approach seeks to identify how best to design legal rules in order to maximize social welfare. Such an efficiency-based perspective applies to major areas of law, including contract, tort, and nuisance law, with the reduction of transaction costs as the unifying legal principle. We will examine the basic problems of those areas, as well as political rules, social conventions, and government organizations.