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What is comparative advantage?
What is comparative advantage?
Nov 16, 2025 9:24 AM

Note: This is post #32 in a weekly video series on basic microeconomics.

What parative advantage? And why is it important to trade? In this video by Marginal Revolution University, economist Don Boudreaux guides us through a specific example surrounding Tasmania — an island off the coast of Australia that experienced the miracle of growth in reverse. Through this example we show what can happen when a civilization is deprived of trade, and show why trade is essential to economic growth.

(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: The big ideas of trade

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