The specified div does not include these paragraphs.
Setting the height as auto means the height is as large as needed to contain whatever is within.
Although the width is specified as 50% as in the original example, the blue background area occupies more than 50% of the screen width. The padding enlarges the div. The content of the div (usually text or images or both) is half the screen width. Measure if you are uncertain.
This link will take you to the page from which you may have come.
This link will take you back to the page on which you can find links to the some of the basic concepts of styling HTML.