Alveoli are the air sacs of the lungs. They have thin walls surrounded by blood capillaries (another layer of simple squamous epithelium). Gas exchange occurs in the alveoli. During inhalation, oxygen gas is in higher concentration in the alveoli than in the blood and so it diffuses into the blood through this thin layer of cells.During exhalation, carbon dioxide is in higher concentration in the blood than in the alveoli and so it diffuses into the alveoli through this thin layer of cells.So, the correct answer is option B.