Respiratory System. The oxygen exchange in the lungs takes place across the membranes of small balloon-like structures called alveoli attached to the branches of the bronchial passages.These alveoli inflate and deflate with inhalation and exhalation. The behavior of the alveoli is largely dictated by LaPlace's law and surface tension.It takes some effort to breathe in because these tiny balloons must be inflated, but the elastic recoil of the tiny balloons assists us in the process of exhalation.his fluid, called a surfactant, lowers the surface tension of the balloon-like alveoli by about a factor of 15 compared to the normal mucous tissue fluid in which they are immersed.