An Academic Advisor Wants to Predict the Typical Starting Salary $$\hat { \beta } _ { 0 } = - 92040 \hat { \beta } 1 = 228 \mathrm {~s} = 3213 r ^ { 2 } = .66 r = .81 \mathrm { df } = 23 \quad t = 6.67$$

question 84

Multiple Choice

An academic advisor wants to predict the typical starting salary of a graduate at a top business school using the GMAT score of the school as a predictor variable. A simple linear regression of SALARY versus GMAT using 25 data points is shown below. $$\hat { \beta } _ { 0 } = - 92040 \hat { \beta } 1 = 228 \mathrm {~s} = 3213 r ^ { 2 } = .66 r = .81 \mathrm { df } = 23 \quad t = 6.67$$
A $95 \%$ prediction interval for SALARY when GMAT $= 600$ is approximately $( \$ 37,915 , \$ 51,984 )$ . Interpret this interval.

• A) We are 95% confident that the SALARY of a top business school graduate with a GMAT of 600 will fall between $37,915 and $51,984.
• B) We are 95% confident that the SALARY of a top business school graduate will fall between $37,915 and $51,984.
• C) We are 95% confident that the mean SALARY of all top business school graduates with GMATs of 600 will fall between $37,915 and $51,984.
• D) We are 95% confident that the increase in SALARY for a 600-point increase in GMAT will fall between $37,915 and $51,984.

Understand the impact of taxes on market equilibrium, including changes in consumer surplus, producer surplus, and deadweight loss.

Calculate the deadweight loss resulting from the imposition of a tax.

Analyze the effects of tax on buyers and sellers in terms of price changes.

Determine how the elasticity of demand and supply influences the distribution of tax burdens and deadweight loss.

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