Chapter 13, Problem 6PS

Is an MBA a golden ticket? Pursuing an MBA is a major personal investment. Tuition and expanses associated with business school programme are costly, but the high costs come with hopes of career advancement and high salaries. A prospective MBA student would like to examine the factors that impact starting salary upon graduation and decides to develop a model that uses program per-year tuition as a predictor of starting salary? Data were collected for 37 full-time MBA programs offered at private universities. The data are stored in FTMBA.

a. Construct a scatter plot.

b. Assuming a linear relationship, use the least-squares method to determine the regression coefficients $b_0$ and $b_1.$

c. Interpret the meaning of the slope, $b_1,$ in this problem.

d. Predict the mean starting salary upon graduation for a program that has a per-year tuition of $\text{\$50,450}\text{.}$

e. What insights do you gain about the relationship between program per-year tuition and starting salary upon graduation?