Is it possible to record audio from a specific application and how?

So here's the scenario, I will be running Skype and a game on the same computer. I only want to record audio from the game, not from Skype. I still need to be able to hear the conversation on Skype though, so I can't just edit the audio levels. I'm using Windows 7. I also only have access to the one computer so it isn't like I can run the programs on different computers. Is this possible through editing settings or a program? If I need a program, the only condition is that is must be free, and by free, I mean freeware, not shareware or torrented or any other piracy. If it is a program, I need to know what to google or better yet, just a link to the program page.