Elves are a mixed bunch—some are inherently good (born on the North Pole) and some are evil (born on the South Pole). The archenemy of Santa Claus, Anti Claus, lives in the South Pole and trains a community of evil elves, helping them procure jobs in Santa’s workshop and ruin Christmas. All elves have the reservation option of posing in a display at the local department store for $25,000 per season.

a. Santa cannot tell the difference between North and South Pole elves when he is hiring them each year because Anti Claus teaches the evil elves to act just like North Pole elves in the interview. To get a job in Santa’s workshop, elves must attend a training class for a certain number of weeks (W) prior to the Christmas season. Suppose it costs $10,000 per week for the North Pole elves to attend the class, while the burden of attending class for the South Pole elves is twice as high, owing to the stress and added expense of living a double life. The North Pole elves can make toys valued at $75,000 per season, while the South Pole elves destroy all of the toys they produce. What is the range of weeks of training Santa can require so that the only elves working in his shop are good elves (and thus he would pay them $75,000)?

b. If all we observed is that all South Pole elves did not get training and did not work for Santa while all of the North Pole elves were trained and worked for Santa, is this consistent with a human capital story, as well? Describe one such human capital story that could produce this outcome.

Answer rating: 100% (QA)

Answer of a According to the human nature no person can hide himself for a long time If we go for a ... View the full answer