It is to calculate the extent of the shape in 2-dimensional space.
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To find the the area of a shape is to find the space that is enclosed within a 2D object. Do not mix it up with volume, which is the space enclosed within a 3D object.
You would find the area of the inside and outside shape (pretending that the inside shape was not in the outside shape). then, you would take the area of the outside shape and subtract the area of the inside shape.
The area of a shape is measured in square units
Shape of what ?
Inside of a shape.