Conservation of Momentum: According to this principle, in an isolated system, the vector sum of linear momenta of all bodies of a system is conserved and is not affected due to their mutual action and reaction.
If two bodies of different masses collide with each other and there is no external force acted on it then,
The initial momentum of bodies = Final momentum of bodies
EXPLANATION:
In a rocket, gasses at high temperatures and pressure are created by the combustion of fuel.
They escape with a high constant velocity via a nozzle.
The large, backward momentum of the gasses gives the rocket an equal forward momentum.
However, due to the decrease in the mass of the rocket fuel system, the acceleration of the rocket continues to increase.
Thus a rocket works on the principle of conservation of Momentum. So option 2 is correct.
Since the energy of the rocket's fuel converts into heat energy that propels the rocket. So the energy of the rocket only is not conserved. The energy of the rocket and the surrounding will be conserved but not of the rocket.
Similarly, the mass of the rocket decreases as the fuel burns. So mass is not conserved.
There is no rotation in the rocket so no meaning of spin angular momentum here.