1. Define the following terms. 1.1 (2 points) Marginal product. 1.2 (2 points) Decreasing (diminishing) marginal returns. 1.3 (2 points) Law of diminishing marginal returns. 1.4 (2 points) Law of diminishing marginal rate of technical substitution. 1.5 (2 points) Fixed cost. 1.6 (2 points) Variable cost. 1.7 (2 points) Sunk cost (also, give one example of a sunk cost).2. (10 points) You were recently hired to replace the manager of the Roller Division at a major conveyor-manufacturing flrm, despite the manager's strong external sales record. Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and crimps rollers, As you begin reviewing the company's production information, you learn that labor is paid $9 per hour and the last worker hired produced 110 rollers per hour. The company rents roller cutters and crimping machines for $14 per hour, and the marginal product of capital is 120 rollers per hour. What do you think the previous manager could have done to keep his job? 3. (10 points) Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combines efforts of capital and more than 90,000 workers. Suppose the European company Airbus enjoys similar production technology and produces similar number of aircraft but that labor costs (including fringe benets) are higher in Europe than in the United States. Would you expect workers at Airbus to have the same marginal product as workers at Boeing? Explain carefully