1. In the UK there is a subsidy available to help with the cost of insulation for houses. Show the effects of this policy on the market equilibrium for insulation material for houses, illustrating what are the costs and benefits for consumers, producers and the government. What would happen if the government decided to cut the level of the subsidy due to a change in spending priorities caused by the COVID pandemic? 2. Distinguish between Increasing Returns to Scale (IRS), Constant Returns to Scale (CRS) and Decreasing Returns to Scale (DRS). What causes IRS and DRS? Can you think of examples of these driving forces from industries that you are familiar with