The correct option is B: Alveoli. Gas exchange of "carbon dioxide and oxygen" takes place in the "alveoli" of the lungs.
EXPLANATION:
Alveoli are present in the alveolar sacs located at the end of respiratory bronchioles. Alveoli have thin walls and look like bubbles in the sacs.
These also are in "direct contact" with the blood capillaries. This contact ensures that "oxygen" is released into the blood capillaries by the alveoli directly.
