Concept:
Simple squamous epithelium is a single layer of thin, flat cells. It is suitable for diffusion, filtration, and exchange of gases.
Step 1: Understanding simple squamous epithelium.
The cells are very thin and flattened. This reduces the distance across which substances have to diffuse.
Step 2: Function in lungs.
The alveoli of lungs are sites of gaseous exchange. Oxygen diffuses from alveoli into blood, and carbon dioxide diffuses from blood into alveoli.
\[
O_2 \leftrightarrow CO_2
\]
Step 3: Why alveoli need thin epithelium.
For rapid gas exchange, the lining must be very thin. Hence, alveoli are lined by simple squamous epithelium.
Step 4: Checking other options.
Skin has stratified squamous epithelium.
Tendon is connective tissue.
Brain is nervous tissue.
Therefore, the correct answer is alveoli of lungs.
\[
\boxed{\text{Alveoli of lungs}}
\]