Explain and sketch the impact of rising energy prices and the rebate on an individual household’s budget constraint

Part A:

Question 1: With UK energy prices rising in 2022, the UK Government gave a £150 council tax
rebate to UK households living in council tax categories A to D. The rebate
effectively increases the (nominal) income of those households. Explain and sketch
the impact of rising energy prices and the rebate on an individual household’s budget
constraint
Question 2: The ONS is investigating the consumption of chocolate in the UK. Using your
knowledge of consumer theory, what variables would you advise the ONS to look at
as key determinants of the consumption of chocolate? Explain.
Question 3: ‘People that are risk averse never gamble’. Discuss.

Question 4: You are working as an economic consultant for a small business. You have found
that the long run total costs are as follows:

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