Note: This is post #31 in a weekly video series on basic microeconomics.

Trade makes people better off, but how? In this video economist Tyler Cowen discuss the importance of specialization and division of knowledge, and how specialization leads to improvements in knowledge, which then lead to improvements in productivity.

(If you find the pace of the videos too slow, I’d mend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Price Controls and Communism