If you are an ambitious elf mama you could make these Micro cupcakes for your elves!
http://www.instructables.com/id/Micro-Cupcakes/
http://www.instructables.com/id/Micro-Cupcakes/
Those are really cute! I could see the 'elves' making some of these overnight. I'd probably cheat and make regular sized cupcakes or even a cake and press thimbles into it to get the little cupcakes. Not sure I'd go through all the effort it would take to find the right thimbles that could go into an oven.