A Study of the Top MBA Programs Attempted to Predict

question 38

Multiple Choice

A study of the top MBA programs attempted to predict the average starting salary (in $1000's) of graduates of the program based on the amount of tuition (in $1000's) charged by the program and the average GMAT score of the program's students. The results of a regression analysis based on a sample of 75 MBA programs is shown below: Least Squares Linear Regression of Salary Interpret the coefficient for the tuition variable shown on the printout.

• A) For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will decrease by $203,402, holding the GMAT score constant.
• B) For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by $394.12, holding the GMAT score constant
• C) For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by $920.12, holding the GMAT score constant
• D) For every $1000 increase in the average starting salary, we estimate that the tuition charged by the MBA program will increase by $920.12.

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Definitions:

Production

The process of creating goods and services from various inputs such as labor, technology, and raw materials.

Variable Costs

Outlays that shift directly in line with the magnitude of output or production.

Production

The creation of goods and services using labor, technology, and inputs of raw materials to meet consumer demand.

Fixed Costs

Fixed costs that are unaffected by the amount of goods produced or sold, like rent, wages, and insurance charges.