What are the two types of text shape that you can define using Text tool?

There are two types of text shape that you can use:

Point text

This text shape type is used to place a line of text onto the Artboard. The text block starts at a specific point and the text within a text block is never wrapped automatically.

• In order to use a Point text block, select the Text tool and click anywhere at the canvas. Once the text cursor appears, type the text.
• To wrap the line manually, press Enter key.
• To finish editing of the text, hit Esc key.

Area text

This text shape type is used to place a block of text into the rectangular area. The text is the automatically wrapped to match the width of the text area. The text that overlaps the height of the text area is hidden. 

• In order to use an Area text block, select the Text tool, press and hold the left mouse button anywhere on the canvas and drag the mouse diagonally to define the rectangular area. Once the rectangle appears, type the text.
• To change the width of the rectangle to change the location at which the lines will get wrapped just resize the rectangle using its borders when the text block is selected.
• To finish editing of the text, hit Esc key.