Without getting into all the details, files on a computer are made up of bytes that are composed of 8 bits (binary digit) each, for example "10011011". Many files can be "compressed" (made to take up less space). For instance, a large area in an image that is composed of a single color might contain many thousands of bytes but could be represented by a set of coordinates within which a single color appears, and this might require fewer than 10 bytes. Although some kinds of compression are "lossy" (quality may be degraded because some information is lost - extremely close colors recorded as the same color), other kinds are loss-less (no information is lost so the exact original can be restored).
You may have encountered compression when sending huge photograph files over email or uploading images to Facebook. Facebook may also make the image dimensions smaller - resizing is different from compression. Note that if you wish to compress an image, you should use Photoshop or another image editing program because ZIP does a poor job on such files.
Various compression utilities for Windows & Mac can compress individual files. They can also compress a collection of files and even compress entire folders and subfolders, putting them all into a single compressed "archive" file. In current versions of Mac & Windows operating systems, compressed folder archiving, for instance using the zip format, is built-in.
In this example, you can right-click on a folder in Windows and select "Send-to" / Compressed (zipped) folder.
Software utilities for zipping and unzipping such as WinZip, 7-Zip, Stuffit, WinRAR, and many more free or inexpensive programs can also be used that have more features than those built-in archivers. For example, you might want to put several folders with all of your exams in a single zip file and password protect it. This single file could then be more easily sent from your home computer to your school computer as an email attachment that someone can only access if they have the pssword.
In the following example, the same folder is compressed using 7-Zip, a free compression program. Although 7-Zip has its own proprietary 7z compression format, it can also use the more universally recognized zip format.
7-Zip (free compression software for many formats)
http://www.7-zip.org/
How to Zip a File in Mac OS X:
http://www.ehow.com/how_4512007_zip-file-mac-os-x.html