In Problem 13.6 on page 494, a prospective MBA student wanted to predict starting salary upon graduation, based on program per-year tuition. The data are stored in FTMBA.

Is an MBA a golden ticket? Pursuing an MBA is a major personal investment. Tuition and expenses associated with business school programs 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 peryear 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.

Source: Data extracted from “U.S. News Business School Compass,” available at premium.usnews.com/best-graduate-schools/top-business-schools/mba-rankings.

a. Construct a 95% confidence interval estimate of the mean starting salary upon graduation of an individual program with peryear tuition cost of $50,450.

b. Construct a 95% prediction interval of the starting salary upon graduation of an individual program with per-year tuition cost of $50,450.

c. Why is the interval in (a) narrower than the interval in (b)?