1.In each of the following situations, identify the relevant economic principle and explain how it applies.

(a) Peter has lived in his own apartment for many years. However, rental costs have recently increased so much that Peter considers moving into a smaller apartment and renting out his own.

(b) Alfonso is a talented singer and he strongly wants to pursue an artist's career. However, he is two years short of graduating from law school. He is certain he will never be a lawyer because he does not like it and has no talent to be a lawyer.However, his family insists he finish his studies, since he has already spent so much time and money on law studies. What should he do?

(c) There are a few industrial sites in town that produce essential goods and services for residents and provide citizens with jobs. However, the businesses, including an airport in the downtown core, also produce pollution, congestion, and noise. People understand the blessings of economic and civil freedoms and are pleased and proud to have productive activities in their town. However, they also crave a more pleasant place in which to live. What economic principle can give these people some guidance about what to do?