More HP, And Better Gas Flow?

In Combustion engines, why dont we Shorten the Exhaust Pipe and Lengthen the stoke in the chambers of these engines, Just like when we breathe if we take a deep breath, we need Large area in us to hold the Breath, but we dont need large exhaust, the engine need short intake and exhaust but larger chambers, I Just dont understand how a 1994 Honda Civic can have more Gas milage than a 2010 Economy Car, can Anyone Explain?