What term defines the benefits to a third party from a transaction?

• A. Negative Externality
• B. Social Benefit
• C. Positive Externality
• D. Lorenz Curve

Answer: (C)

Externalities describe how a transaction affects people who aren’t directly involved. When those side effects give benefits to others, it’s a positive externality. The question asks for the term that defines benefits to a third party from a transaction, so positive externality is the precise fit. For contrast, a negative externality would involve costs to others, the Lorenz Curve relates to income distribution, and social benefit is a broader idea that includes private benefits as well as external ones but isn’t the specific label for third-party benefits in a transaction.