AutoCAD Pocket Reference, 4th Edition

When drawing with a computer, you must " set up your drawing area" just as you would on your drawing board if you were drawing with pencil and paper. You must decide what size your paper you will need, what Units of measurement you will use (feet and inches or decimals, etc) and how precise you need to be. In CAD these decisions are called "Setting the Drawing Limits, Units and Precision".
AutoCAD 2010 also has a new feature "Initial Setup" that allows you to select an Industry, add task-based tools and specify the drawing template you want to use when creating a new drawing. See Help Menu for detailed instructions.
DRAWING LIMITS
Consider the drawing limits as the size of the paper you will be drawing on. You will first be asked to define where the lower left corner should be placed, then the upper right corner, similar to drawing a Rectangle. An 11 8.5 piece of paper would have a lower left corner of 0,0 and an upper right corner of 11, 8.5. ( 11 is the horizontal measurement X-axis and 8.5 is the vertical measurement Y-axis.)
Select the DRAWING LIMITS command by typing: Limits
The following will appear on the command line:

Type the X,Y coordinates 0, 0
The command line should now read:
Specify upper...