The correct option is C Bronchioles
Trachea is a straight tube extending up to the mid-thoracic cavity, which divides at the level of 5th thoracic vertebra into a right and left primary bronchi. Each bronchi undergoes repeated divisions to form the secondary and tertiary bronchi and bronchioles ending up in very thin terminal bronchioles. The tracheae, primary, secondary and tertiary bronchi, and initial bronchioles are supported by incomplete cartilaginous rings. Each terminal bronchiole gives rise to a number of very thin, irregular walled and vascularised bag-like structures called alveoli. The branching network of bronchi, bronchioles and alveoli comprise the lungs. Thus trachea and bronchi are present outside the lungs and alveoli are tiny bags of lungs.