1.You have been hired to replace the manager of the Toys for Tots charity that uses only two inputs, labor and capital, to produce and distribute toys to poor children. The charity can hire as much labor as it wants at a wage of $5 per hour and can rent as much capital as it wants at a price of $5 per hour. After you look at the company books, you learn that the charity has been using labor and capital in amounts that imply a marginal product of labor of 50 and a marginal product of capital of 100.

a. Is the charity running right? Explain.

b. How can the charity be improved? Explain.

c. What do Microeconomic assumptions imply about the effectiveness of giving toys to poor children? Explain.