Your lungs are a series of tubes which decrease in size as they branch out. They eventually meet up with blood cells and transfer oxygen to the blood. You can find out all you want to know about lungs in any encyclopaedia.
To find out your lung capacity, mark a 3 litre plastic bottle in 250ml sections and set up the equipment as shown in the picture. Make sure that both the upturned bottle and the basin have water in them. Blow through the straw to displace the water in the bottle. The trapped air shows how much your lungs can hold. When we tried this we found our lung capacities varied from 1 litre to 2.25 litres in a class of 10 year old children.