Critical Reasoning — Assumptions Statement: “The cost of living has gone up in India.” Which assumptions logically underlie this statement?

Introduction / Context:
The claim “cost of living has gone up” refers to general living expenses. We must identify what the speaker must believe for this to be a sensible conclusion.

Given Data / Assumptions:

• I: The prices of essential commodities have gone up in recent times.
• II: Many luxury goods are available in plenty in the country.

Concept / Approach:
Cost of living is primarily affected by essential goods and services (food staples, rent, utilities, transport). Availability of luxury goods does not directly determine the cost of living.

Step-by-Step Solution:
1) If essentials cost more, then maintaining the same standard of living becomes more expensive—this underpins the statement. Hence assumption I is necessary.2) Assumption II concerns luxury abundance, which may occur alongside high or low costs of living. It is neither necessary nor sufficient to justify the claim.3) Negate I: If essential prices have not risen, the blanket statement “cost of living has gone up” becomes doubtful.4) Negate II: Even if luxury items are scarce, the cost of living could still rise due to essentials. Thus II is irrelevant.

Verification / Alternative check:
Check CPI logic: CPI baskets are dominated by essentials. A rise in these categories validates the speaker’s statement; luxury good availability does not.

Why Other Options Are Wrong:

• Only II / Both / Either: II does not support the cost-of-living claim.
• Neither: I is indeed required.

Common Pitfalls:
Do not equate “more luxury goods” with “higher living cost.” These are different economic indicators.

Final Answer:
Only assumption I is implicit