What is the setting of chapter one of "The Hobbit"?

The Hobbit starts out at Bag End, which is the Hobbit hole at the end of Bagshot Row in Hobbiton, which is located in the center of the Shire, which is in the northwest area of Middle Earth. Bag End is the home of Bilbo Baggins, passed down to him from his parents upon their deaths. After describing the typical Hobbit hole (a small, comfortable series of tunnels typically underground), we see Bilbo for the first time, smoking a pipe outside of his front door. Gandalf finds him there and says that he is looking for someone to go on an adventure with him. Later in the chapter, we move to the inside of Bilbo's home, where he reluctantly entertains Thorin and his company of Dwarves. The rest of the chapter is spent inside Bag End as Bilbo learns about Thorin's plan to reclaim Erebor from the dragon Smaug.