Exercise 3: Variables vs. Locals — The Practical Difference — Possible Solution
====================================================================

A VARIABLE is an INPUT -- a value that comes from OUTSIDE the
configuration: a `.tfvars` file, a `-var` flag, an environment
variable, or a default the configuration itself supplies but which
callers are free to override. It represents something the person or
system running Terraform gets to choose.

A LOCAL is an internal COMPUTED value -- it isn't set from outside at
all; it exists purely to give a name to an expression that's used more
than once, so the configuration doesn't repeat the same interpolation
logic in multiple places. Nothing outside the configuration can ever
override a local's value; it's fully determined by the configuration's
own logic (which may itself reference variables).

When to use each, concretely:

- Use a VARIABLE for anything that genuinely needs to differ between
  runs or environments without editing the configuration file itself
  -- e.g. `environment` ("dev"/"staging"/"prod"), `instance_count`, or
  a region -- exactly the kind of value Chapter 8's separate
  `dev.tfvars`/`prod.tfvars` files will supply per environment.

- Use a LOCAL for a value that's DERIVED from other values (often
  variables) and reused several times -- e.g. `local.name_prefix =
  "${var.environment}-${var.project}"`, computed once and referenced
  everywhere a consistent naming prefix is needed, rather than
  repeating that same interpolation expression in every resource block
  and risking the strings drifting out of sync if one copy is edited
  and another is missed.

WHY THIS WORKS AS AN ANSWER
------------------------------
This states the core distinction correctly (external input that can be
overridden vs. an internal, derived, non-overridable computed value)
and gives one concrete example of each drawn directly from the
chapter's own material, rather than a vague "variables are for
settings, locals are for other stuff" gloss.