An ideal cost-of-living index measures:
A) the relative cost of maintaining a particular utility level.
B) the relative changes in consumer satisfaction that arise from price increases.
C) the relative price of those goods that are considered to be necessities in consumption.
D) none of the above

Question

Quizplus · Accepted Answer

An ideal cost-of-living index should measure the relative cost of maintaining a particular utility level, which takes into account the prices of goods and services that are essential for maintaining a certain standard of living. This is because consumers are interested in maintaining a certain level of satisfaction or utility when making purchasing decisions, and a cost-of-living index that reflects these preferences would be the most relevant and useful for consumers and policy-makers.

An Ideal Cost-Of-Living Index Measures