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This chapter explains how the principles of chemical thermodynamics are used in the construction and interpretation of phase diagrams. After a brief review of the laws of thermodynamics, it describes the concept of Gibbs free energy and its application to transformations that occur in single-component and binary solid solutions. It then examines the relationship between the free energy of a solution and the chemical potentials of the individual components. It also explains how to account for the heat of mixing using quasi-chemical models, discusses the effect of interatomic bond energies and chemical potentials, and shows how the equilibrium state of an alloy can be obtained from free-energy curves.

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