Class 7 new ncert Chapter 12 SST Solution - Understanding Markets

Q & A —  6th   7th   8th   9th   10th

Questions and Activities (NCERT Based Solution)

Question 1. What are the main features of a market? What features did you observe when you recently visited a market?

Answer: The main features of a market are as follows—

• There are buyers and sellers in the market.
• Goods and services are bought and sold here.
• The prices of goods are determined.
• Bargaining can take place between buyers and sellers.
• Different types of goods and services are available in the market.
• Shopkeepers and customers interact with each other.

In the market, I observed different shops, customers, sellers, prices of goods and bargaining taking place at some shops.

Question 2. Look at the quotation of a famous economist given at the beginning of this chapter. Discuss the relevance of the quotation in the context of this chapter.

Answer: In the context of the chapter, it is important that the market is an essential part of people's economic life. The market connects producers and consumers with each other and makes the exchange of goods and services easier. A market is not only a place for buying and selling, but it also gives people an opportunity to meet and exchange ideas and traditions.

Question 3. In the given example of buying and selling guavas, if the seller is getting a good price, then he will try to buy more guavas from the farmers so that he can sell them at the same price and increase his income. What will the farmer do in such a situation? Do you think he will start thinking about the demand for guavas in the next season? What could be his possible response?

Answer: Yes, the farmer may start thinking about the demand for guavas in the next season. If he finds that the demand and price of guavas are good, he may decide to grow more guavas in the next season. This may increase the supply of guavas in the market. The farmer will also see whether he can get a fair price and profit by producing more.

Question 4. Match the following types of markets with their characteristics—

Answer:

Market	Correct Criterion
Direct Market	Direct presence of buyers and sellers is necessary.
Online Market	Buyers and sellers meet virtually and can transact at any time.
Domestic Market	Located within the boundaries of a nation.
International Market	Goods and services that are sent outside the boundaries of a nation.
Wholesale Market	Deals in large quantities.
Retail Market	Delivering goods and services to final consumers.

Question 5. Generally, price is determined by the interaction of buyers' demand and sellers' supply. Can you think of products where the price is high even though the number of buyers demanding the product is small? What could be the reasons for this?

Answer: Yes, the number of buyers demanding some special or expensive goods may be small, yet their prices may be high. The reasons may be—

• The production of the good is low.
• The good is rare or special.
• It requires more time and skill to make it.
• The production cost is high.
• The quality or special features of the good are higher.

Therefore, the number of buyers alone does not determine the price; factors such as demand, supply and production cost are also important.

Question 6. Consider a real-life situation of a retail vegetable seller—A family came to a shop to buy vegetables. The seller, who was selling beans on a cart, had priced them at ₹30/- per kilogram. The woman started bargaining with the seller to bring the price below ₹25/- per kilogram. The seller refused to sell at that price and said that he would suffer a loss at that price. The woman left and then the family went to a nearby supermarket and bought vegetables there. At the supermarket, they paid ₹40/- per kilogram for well-packaged beans. Why did the family do this? Apart from prices, are there any other factors that affect buying and selling?

Answer: The family bought beans from the supermarket because they got well-packaged beans there and were willing to pay a higher price for that quality and convenience.

Yes, apart from price, many other factors also affect buying and selling, such as—

• Quality of the product.
• Packaging of the product.
• Cleanliness and safety of the product.
• Trust in the seller.
• Convenience and location of the shop.
• Popularity of the product and reviews from other consumers.

Question 7. Some districts of India are famous for growing tomatoes. However, in some seasons, the situation is not good for farmers. There are reports of farmers throwing away their produce when there is a bumper crop, resulting in all their labour being wasted. Why do you think farmers do this? What role can wholesalers play in such a situation? What could be the possible measures to ensure that tomatoes are not wasted and farmers also do not suffer losses?

Answer: When there is a bumper crop, the supply of tomatoes in the market increases greatly. If their demand is low at the same time, the price may fall very low. In such a situation, farmers do not get a fair price for selling tomatoes and may suffer losses.

Role of wholesalers:

• They can buy tomatoes from farmers in large quantities.
• They can transport them to other markets.
• They can send tomatoes to areas where there is demand.

Possible measures:

• Storing tomatoes safely in cold storage.
• Processing them to make sauce, puree, etc.
• Transporting them to markets in other areas.
• Creating a better market system between farmers and buyers.
• Developing an appropriate supply chain.

This will reduce the wastage of tomatoes and enable farmers to get a better price for their produce.

Question 8. Have you heard about or visited any fair organised by your school or another school? Discuss such fairs with your friends and teachers. How do buying, selling and bargaining take place in these fairs?

Answer: In a school fair, shops selling different goods and food items are set up. Students, teachers and other people buy goods as buyers. At some shops, the prices of goods are fixed in advance, while for some goods, bargaining may take place between the seller and the buyer. In this way, buying and selling take place directly at the fair.

Question 9. Choose any five products and examine their labels along with the certification marks discussed in the chapter. Did you find any products that did not have a standard mark? What does this indicate?

Answer: While examining the labels of five products, certification marks such as FSSAI, ISI, AGMARK and BEE can be seen.

If a product does not have the relevant certification mark, it may mean that the certification is not applicable to that product or that the relevant standard mark has not been displayed on the product. Therefore, consumers should not check only the mark but should also examine the label, quality, quantity, manufacturing date, expiry date and other information.

Question 10. You and your classmates have made a soap. Design a label for its packaging. What do you think should be written on the label so that consumers can examine the product better?

Answer: The following information should be given on the soap label—

• Name of the product.
• List of ingredients.
• Net quantity.
• Date of manufacture.
• Expiry date, if applicable.
• Maximum Retail Price (MRP).
• Name and address of the manufacturer.
• Batch number.
• Instructions for use.
• Precautions.
• Relevant certification or quality mark, if applicable.

This information enables consumers to make better decisions about the quality, price, quantity and safety of the product.

Important Questions and Answers

Question 1. What is a market?

Answer: A place where people buy and sell various goods and services is called a market. A market can be direct as well as online.

Question 2. What are the main features of a market?

Answer: The main features of a market are—

• There are buyers and sellers in it.
• Goods or services are bought and sold.
• Buyers and sellers agree on a price.
• Price is an important feature of a transaction.
• Bargaining also takes place in many markets.

Question 3. What is meant by trade?

Answer: The buying and selling or exchange of goods and services between individuals or countries is called trade.

Question 4. What is price?

Answer: Price is the amount at which the seller is willing to sell a good or service and the buyer is willing to buy it.

Question 5. Why is bargaining done?

Answer: The buyer wants to buy a good at a lower price, while the seller wants a price that gives him a fair profit. Therefore, both negotiate about their respective prices. The transaction is completed only when they reach an agreement.

Question 6. What happens if the buyer and seller do not agree on a price?

Answer: If the buyer and seller do not agree on an acceptable price, the transaction cannot take place.

Question 7. What are demand and supply?

Answer:

• Demand: The quantity of a good or service that a buyer is willing and able to purchase at a particular price at a particular time.
• Supply: The quantity of a good or service that a seller is willing and able to sell at a particular price at a particular time.

Question 8. How is the price determined in a market?

Answer: Price is generally determined through the interaction between the demand of buyers and the supply of sellers. A fair price is one at which both buyers and sellers can agree.

Question 9. What is a direct market?

Answer: A market where buyers and sellers meet directly and buy and sell goods or services in exchange for money is called a direct market. Weekly markets, haats, local shops and malls are examples.

Question 10. What is an online market?

Answer: A market where buyers and sellers transact goods and services through websites or mobile apps using phones or computers is called an online market. In this, a buyer can order goods while sitting at home and make online payments.

Question 11. What is the difference between a domestic market and an international market?

Answer:

• Domestic Market: A market in which the buying and selling of goods and services takes place within the geographical boundaries of a country.
• International Market: A market in which the buying and selling of goods and services takes place outside the country's boundaries with other countries.

Question 12. What are imports and exports?

Answer:

• Import: Bringing goods or services into one's own country by purchasing them from other countries.
• Export: Selling goods or services produced in one's own country to buyers in another country.

Question 13. What is a wholesale market?

Answer: In a wholesale market, wholesalers buy goods in large quantities from producers or manufacturers. They then supply these goods to retailers.

Question 14. What is a retail market?

Answer: In a retail market, retailers sell goods in small quantities to final consumers. Here, goods are generally used for consumption and not for resale.

Question 15. What is the role of a distributor?

Answer: Distributors take goods from producers and wholesalers and deliver them to retailers. They help reduce difficulties related to distance and geographical areas.

Question 16. What are warehouses and cold storages?

Answer:

• Warehouse: A place where products are stored.
• Cold Storage: A special type of warehouse where perishable goods are kept safe at low temperatures.

Question 17. Why are markets important in people's lives?

Answer: Markets make transactions between producers and consumers easier. They provide people access to goods and services that they cannot produce themselves. Markets help meet the needs of people, families and businesses.

Question 18. What is the non-economic importance of markets?

Answer: Markets are not only places for buying and selling. People interact with one another there and also exchange ideas and traditions. Many people develop long-term and trustworthy relationships with local shopkeepers, tailors, goldsmiths or doctors.

Question 19. What is the role of the government in the market?

Answer: The government plays an important role in ensuring that markets function fairly and safely. It—

• Controls prices.
• Protects consumers and producers.
• Implements quality and safety standards.
• Reduces the negative effects of markets.
• Provides public goods and services.

Question 20. Why does the government determine maximum and minimum prices?

Answer: The government may set an upper limit on the prices of essential goods and services so that consumers do not have to pay very high prices. Minimum prices are fixed for agricultural products to try to protect farmers from losses.

Question 21. What is the role of the government in ensuring quality and safety standards?

Answer: The government ensures that necessary quality and safety standards are followed in the production of goods and services. For example, procedures for testing and approving medicines are established.

Question 22. How does the government help reduce external effects of the market?

Answer: Some production activities can harm the environment. To reduce such negative effects, the government makes and implements rules. For example, rules can be made to reduce the harm caused by single-use plastic.

Question 23. What are public goods and services?

Answer: Goods or services that are available to all members of society and whose present use does not reduce their availability in the future are called public goods. For example, public parks, roads and security services.

Question 24. How can consumers assess the quality of a product?

Answer: While buying a product, consumers can check its quality, quantity, manufacturing date, expiry date, maximum retail price, ingredients, manufacturer's information and relevant certification marks. In online shopping, reviews from other consumers can also be useful.

Question 25. What is the importance of the FSSAI mark?

Answer: The FSSAI, or Food Safety and Standards Authority of India, mark indicates that a food product has been examined according to prescribed food safety and quality standards. It helps consumers identify the quality of food products.

Question 26. For which goods is the ISI mark important?

Answer: The ISI mark issued by the Bureau of Indian Standards (BIS) is generally given on electrical equipment, construction materials, motor vehicle wheels and paper, etc. It indicates the quality and safety of the product.

Question 27. What is AGMARK?

Answer: AGMARK is a certification mark given for agricultural products such as vegetables, fruits, grains, pulses, spices and honey, etc.

Question 28. What does the BEE Star Rating indicate?

Answer: The Star Rating of BEE, or the Bureau of Energy Efficiency, indicates the energy efficiency of an electrical appliance. An appliance with more stars generally uses less energy and electricity, which can reduce electricity costs and its impact on the environment.

Question 29. Why are online reviews useful for consumers?

Answer: Online reviews and feedback from other consumers provide information about a good or service. This can help consumers make better decisions while shopping online.

Question 30. Why is the chain of producers, wholesalers, distributors and retailers necessary in the market?

Answer: This chain helps deliver products from producers to final consumers. It ensures a continuous supply of goods and makes necessary goods easily available to consumers.

Question 31. What factors helped Surat become an important trading centre?

Answer: The textile and diamond industries developed in Surat. In addition, the network of ports, roads and railways made the movement of goods and trade easier. Skilled craftsmen and their skills passed down from generation to generation also contributed to making Surat a trading centre.

Question 32. What is the most important function of a market?

Answer: The main function of a market is to make the exchange of goods and services between buyers and sellers easier. This exchange takes place at a price agreed upon by both and determined by the interaction of demand and supply.

Think about it, Let’s Explore and Don’t miss out

Question 1. What would Hampi Bazaar have been like at the height of its prosperity?

Answer: Hampi Bazaar must have been a very large and prosperous market. Grains, seeds, milk, oil, silk, animals, birds, jewellery and many other goods were traded there. Many artisans also worked there.

Question 2. What similarities could there be between old markets and present-day markets?

Answer: In both, goods and services are bought and sold. Both have buyers and sellers, and prices of goods are determined. The difference is that today, because of online markets, shopping can also be done from home.

Question 3. Why does bargaining take place between the buyer and seller of guavas?

Answer: The seller wants to sell guavas at a price that gives them a profit, while the buyer wants to buy guavas at a lower price. Therefore, both try to decide a price through discussion at which both can agree.

Question 4. What could be the reasons if there is less bargaining in a market?

Answer: Bargaining is less where the prices of goods are already fixed. For example, in large stores or supermarkets, prices are written on the products, so customers generally buy them at the same price.

Question 5. Why can vegetables be cheaper in a weekly market than on other days?

Answer: Many sellers come together in a weekly market and there is competition among them. They may sell goods at lower prices to attract customers.

Question 6. Why are heavy discounts offered on woollen clothes at the end of winter?

Answer: At the end of winter, the demand for woollen clothes decreases. Therefore, shopkeepers offer discounts to sell the remaining clothes quickly.

Question 7. What are the advantages and disadvantages of online and direct shopping?

Answer: Advantages of online shopping: Shopping can be done from home and it is easy to compare many products. Disadvantages: It is not possible to directly see or touch the product before buying it.

Advantages of direct shopping: The quality of the product can be checked by seeing it directly, and one can talk directly with the shopkeeper. Disadvantages: One has to go to the shop and it may take time.

Question 8. For which services may a direct market be necessary?

Answer: Services that require personal contact may need a direct market. For example—clothes stitching, hair cutting, some types of repair work and personal medical services.

Question 9. The stock market is an example of what type of market?

Answer: The stock market is a market where goods and ordinary services are not bought and sold; instead, shares are traded.

Question 10. What is the role of wholesalers and retailers in taking goods from producers to consumers?

Answer: Producers make goods. Wholesalers buy goods from them in large quantities and supply them to retailers. Retailers sell these goods in smaller quantities to final consumers. In this way, goods reach the consumers.

Question 11. How did ports, highways and railways help in making Surat a trading centre?

Answer: These means of transport made it easier to bring goods and raw materials to Surat and to transport finished goods to other places. This helped in the development of trade and industries in Surat.

Question 12. What would be the effect on our lives if markets did not exist?

Answer: Without markets, it would be difficult for farmers and producers to sell their goods. People would face difficulty in getting rice, wheat, pulses, vegetables, fruits, clothes and other essential goods. Producers would also find it difficult to obtain the necessary raw materials.

Question 13. If the demand for a product increases, what effect could it have on the producer?

Answer: The producer comes to know that people want to buy more of that product. Therefore, the producer may increase its production. For example, when the demand for refrigerators that consume less electricity increased, producers started making such refrigerators.

Question 14. If there is no ready market for an artist’s product, what difficulty might the artist face?

Answer: It may be difficult for the artist to find buyers for their product. It may also be difficult to decide where and at what price to sell the product. The artist can look for buyers through different places, exhibitions or other available means.

Question 15. What is the speciality of Ima Keithel market?

Answer: Ima Keithel is a unique market in Imphal, Manipur. About 3,000 women run their shops there. Besides being a source of employment and income, this market is also a place where people from different communities meet and exchange ideas and traditions.

Question 16. Why do sellers selling turmeric and kumkum in South India give a small amount of turmeric and kumkum free to customers?

Answer: It is not only a matter of buying and selling but also a social and cultural tradition. Sellers give a small amount of turmeric and kumkum to customers free of cost as a gesture of good wishes.

Question 17. If the supply of onions decreases in a particular season, what effect could it have on their price?

Answer: If the supply of onions decreases and their demand remains the same, the price of onions may increase. If the supply increases and demand decreases, the price may decrease. This shows the relationship between demand and supply.

Question 18. What could happen if onion suppliers do not bring sufficient quantities of onions to the market?

Answer: There may be a shortage of onions in the market and their price may increase. In such a situation, the government may monitor the market situation and take appropriate steps to maintain supply and protect the interests of consumers.

Question 19. What example related to consumer protection is found in Kautilya’s Arthashastra?

Answer: Kautilya’s Arthashastra contained instructions for traders selling ghee. If the quantity became less because some ghee stuck to the measuring container, the seller had to give the customer 1/50th part more as compensation.

Question 20. Why does the government make rules in the market?

Answer: The government makes rules to ensure that the market works fairly and consumers are not exploited. Rules help ensure the quality and safety of goods, correct weights and measures, and reasonable prices.

Question 21. Where may the government have to intervene in the market?

Answer: The government may intervene to control prices, implement quality and safety standards, protect consumers, prevent harm to the environment, and provide public goods and services.

Question 22. What things should a consumer pay attention to while buying marbles?

Answer: The consumer should pay attention to the size, strength, price and attractive colour of the marbles. This helps the consumer choose the right product according to their needs.