Final answer:
In response to high CO2 levels, the bronchioles dilate to increase airflow and facilitate better gas exchange.
Step-by-step explanation:
When there is a small airflow, indicating insufficient ventilation, the high partial pressure of CO2 will act on the smooth muscles of the airway. This high CO2 concentration will cause the bronchioles to dilate, allowing for an increase in airflow. Consequently, the correct answer is (a) Dilate, increase. This response enhances the gas exchange process by allowing more carbon dioxide to be exhaled from the body.