Apple inc wants me to incur costs for replacing my Laptop which has not worked properly and is under warranty. What do I do?

The only way to answer your question would be to carefully read the terms of the Warranty.  Some waranties have a provision for replacement after a certain number of repairs, but most do not.  Unless your warranty specifically allows for a refund, you probably are not entitled to a refund.  It may be that they are only obligated to provide you with a replacement with the same features, and the price does not matter.  Because computer technology advances quickly, a high-end computer three years ago may be a low end, cheaper computer today.  But if you are getting an equivalent machine, it may fulfill your warranty.Note: automobiles have a specific "lemon law," but there is no such law for computers.  It depends on the terms of your waranty.  There are some general laws that may apply when you first purchase the computer, but these "implied warraties of merchantability and fitness for a particular purpose" are usually disclaimed in the written warranty.  In any event, they would not apply to a three year old computer.