Android : Android Context object's reference in User defined Class

I have a very simple code which displays a Toast message upon a Button click

public class MainActivity extends Activity {

Button clickMe;
@Override
protected void onCreate(Bundle savedInstanceState) {
    super.onCreate(savedInstanceState);
    setContentView(R.layout.activity_main);
    clickMe = (Button) findViewById(R.id.button1);
    clickMe.setOnClickListener(new OnClickListener() {

        @Override
        public void onClick(View v) {
            Toast msg = Toast.makeText(getApplicationContext(), "Hello World !", Toast.LENGTH_LONG);
            msg.show();
        }
    });
}

@Override
public boolean onCreateOptionsMenu(Menu menu) {
    // Inflate the menu; this adds items to the action bar if it is present.
    getMenuInflater().inflate(R.menu.main, menu);
    return true;
    }
  }

I was wondering how I'm able to get reference to the Context object simply invoking

getApplicationContext()

inside Toasts' makeText method since I never instantiated Context (which I can't anyway since it's abstract) nor it's subclasses.

Can anyone please explain me when (or where) the reference was created and how come it's available in my class MainActivity?

A simple example with few classes to achieve the same will be highly appreciable.

thanks in advance!