Juan’s decision to use the few computer chips that he has left to make gaming consoles instead of electric bicycles best illustrates the concept of distribution of scarce resources. This concept refers to how limited resources (in this case, computer chips) are allocated to different uses when there is not enough supply to meet all demands. Juan is prioritizing one product over another based on the availability of resources.
Juan owns a toy company that makes both electric bicycles and gaming consoles. The electric bicycles and gaming consoles use the same computer chips. Unfortunately, the only factory in the world that makes these computer chips was damaged in a hurricane and cannot produce more. Fortunately, Juan has a small stockpile of the computer chips, but not enough to continue making both electric bicycles and gaming consoles. Juan chooses to stop making the electric bicycles and to use the remaining computer chips to make only gaming consoles. Juan’s decision to use the few computer chips that he has left to make gaming consoles instead of electric bicycles best illustrates which economic concept?(1 point)
Responses
Economic surplus
Production possibilities frontier
Command economy decision-making
Distribution of scarce resources
1 answer