This thesis examines Robert Alexy s model for the application of legal principles, exploring the connection between Alexy s model and the typically microeconomic theories which inspired, in part, Alexy s thinking. Economic concepts are presented in a manner that allows readers who are not familiar with economic theory to assimilate and understand the notions contained in Alexy s work. Special attention is given to the notion of optimization, which occupies a fundamental role in Alexy s definition of legal principles. The thesis also explores in detail the influence of cost/benefit thinking on Alexy s model, leading to his proposal for resolving conflicts between principles. The incorporation of cost/benefit analysis - typical of economic theory - into the analysis of complex legal questions raises a number of interesting issues, which are examined in the context of competition law. Because legal and economic theories converge in this area of the law, so that cost/benefit analysis naturally applies, competition law furnishes examples that facilitate understanding and acceptance of Alexy s model. Certain other aspects of the Weight Formula elaborated by Alexy are also studied, again linking Alexy s theories to competition law. A central concern of this thesis is to highlight how Alexy s model can reduce the space usually occupied by intuition and subjectivism in the complex analysis of situations where principles collide.