First click, sets the beginning point. Second click, sets the next point on the X axis, goes straight left/right from the first point. Third click, sets the point on the Y axis, goes straight up/down from the second point.
C is your Hypotenuse. You can do that math to find out as well because A and B are given to you. Just square A, square B, add them together, and then find the square root of that. The length of all sides are determined by Scratch's movement system, which goes in "steps". so if A was 50, it would take 50 steps to get from point 1 to point 2.