Several small craters lie in the floor and on the walls of crater 2. which is older, crater 2 or the smaller craters inside it?

Well, think of it this way. If you put a big paper circle on the ground, and then you put smaller circles on top of the big circle, which one would have been there longer? The big circle, of course. So the same logic applies here: if the smaller craters had been older than the big crater, then when the big crater was formed, the smaller ones would've been buried. Therefore, crater 2 is older than the smaller craters inside it.
Hope that helped! =)