Bronchi branch into smaller and smaller tubes known as bronchioles . Bronchioles terminate in grape-like sac clusters known as alveoli . Alveoli are surrounded by a network of thin-walled capillaries . Image from W.H. Freeman and Sinauer Associates, used by permission. The bottom of the thoracic cavity is formed by the diaphragm .
Ventilation is the mechanics of breathing in and out.
When you inhale, muscles in the chest wall contract, lifting the ribs and pulling them, outward. The diaphragm at this time moves downward enlarging the chest cavity. Reduced air pressure in the lungs causes air to enter the lungs. Exhaling reverses theses steps. Image from W.H. Freeman and Sinauer Associates, used by permission.