Juan's decision to use the remaining computer chips to make gaming consoles instead of electric bicycles illustrates the concept of distribution of scarce resources. He is allocating his limited resources (computer chips) to one product over another based on his choice of what to produce, demonstrating how resources must be distributed when they are scarce.
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)
O Economic surplus
O Command economy decision-making
O Production possibilities frontier
O Distribution of scarce resources
1 answer