Diminished lung capacity is common among those with a history of smoking, asthma, or living in a city. Pulmonary function tests are very important in determining how well your lungs are working, plus most lung problems can be successfully treated if detected early. These tests will show how much air your lungs can hold, how quickly you can move air in and out of your lungs and very importantly, how well your lungs move oxygen into your blood and how well it moves carbon dioxide out of your blood.