putting node on heroku- Getting started
===

I am a begineer with Node and Heroku. 

Was going through this link  **https://devcenter.heroku.com/articles/nodejs** wherein they have a section "**Declare Dependencies With NPM**". 

    {
      "name": "node-example",
      "version": "0.0.1",
      "dependencies": {
        "express": "2.5.x"
      },
      "engines": {
        "node": "0.8.x"
      }
    }

What i couldn't understand from this section is where do i keep my package.json file. also how do i install dependencies locally

thanks
Amit