Web server performs just request and response .. where as Application server perform additional features such as connection pooling,transaction,loadbalancing ,security etc
A Web Server understands and supports only HTTP protocol whereas an Application Server supports HTTP,TCP/IP and many more protocols. Also many more features such as Caches,Clusters,Load Balancing are there in Application Servers which are not available in Web Servers. We can also Configure Application Servers to work as Web Server. In short, Applicaion Server is a super set of which Web Server is a sub set.
Example of WebServer: Tomcat
Example of WebServer: Weblogic