Which type of real option allows a project to be expanded if demand turns out to be greater than expected? abandonment option expansion option timing option flexibility option consider the following example: smoltz motors has plants around the country that specialize in specific models of cars. smoltz has determined that lower demand has led the firm’s inventory of suvs to be too high. smoltz wants to stop production for its suvs and focus on its sedans. this example describes a real option to .

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; intellectual property protection;

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