The mechanism by which oxygen moves into capillaries from alveoli is
a. active transport
b. facilitated transport
c. diffusion
d. osmosis

The answer is c.diffusion. 
Diffusion is the movement of ions, molecules or atoms form high concentration to low concentration across the membrane without the need of any energy or any membrane gates. The oxygen enters the alveoli will be dissolved in the water vapor that is present on the wall of the alveoli and will diffuse directly to the blood across the alveolar membrane.

Because a model would make the investigation easier to understand

The density would be 1.622