Question Answers for Chapter 12 Understanding Markets Class 7 Social Science Exploring Society: India and Beyond
Class 7 Social Science Understanding Markets Extra Questions
Very Short Answer Questions
Question 1. Who was Adam Smith?
Answer
Adam Smith was an 18th-century economist who believed markets grow when people need goods they can't produce themselves.
Question 2. What is a physical market?
Answer
A market where buyers and sellers meet in person to exchange goods and services.
Question 3. What is an online market?
Answer
An online market is where buyers and sellers transact through apps or websites.
Question 4. What is a wholesale market?
Answer
A wholesale market is where goods are bought in bulk by wholesalers and sold to retailers.
Question 5. What is a retail market?
Answer
A retail market is where goods are sold in smaller quantities to consumers.
Question 6. What does “demand” mean in a market?
Answer
Demand refers to the amount of goods or services buyers are willing to buy at a given price.
Question 7. What does “supply” mean in a market?
Answer
Supply refers to the amount of goods or services sellers are willing to offer at a given price.
Question 8. What is a domestic market?
Answer
A domestic market is where trade takes place within a country's borders.
Question 9. What is an international market?
Answer
An international market is where trade happens between different countries.
Question 10. What is a price ceiling?
Answer
A price ceiling is the maximum price set by the government to protect buyers from excessively high prices.
Question 11. What is a price floor?
Answer
A price floor is the minimum price set by the government to ensure producers receive a fair income.
Question 12. What is the role of guilds in a market?
Answer
Guilds are groups of traders or craftsmen who work together to set rules and standards for their trade.
Question 13. What is the role of price in a market?
Answer
Price is the amount agreed upon by buyers and sellers for goods or services.
Question 14. What is the price negotiation process in markets?
Answer
Price negotiation is the process where buyers and sellers agree on a price for goods or services.
Question 15. What is the significance of Hampi Bazaar in history?
Answer
Hampi Bazaar was a thriving market in the 16th century, known for its abundance of goods like grains, silk, and jewels.
Question 16. What is the role of markets in society?
Answer
Markets provide goods and services that individuals and businesses cannot produce themselves, supporting daily life.
Question 17. What are public goods?
Answer
Public goods are services or products like parks or roads that are provided by the government and are available to everyone.
Question 18. What is a government’s role in markets?
Answer
The government ensures fair pricing, monitors quality and safety standards, and protects consumers and producers from exploitation.
Question 19. What is the significance of the ISI mark on appliances?
Answer
The ISI mark ensures that electrical appliances meet quality and safety standards in India.
Question 20. What is the AGMARK certification used for?
Answer
The AGMARK certification ensures the quality of agricultural products like vegetables, fruits, and pulses.
Question 21. What is the BEE star rating?
Answer
The BEE star rating indicates the energy efficiency of electronic products like refrigerators and air conditioners.
Question 22. What is the purpose of the FSSAI mark on food products?
Answer
The FSSAI mark ensures that food products meet safety standards and are safe for consumption.
Question 23. What is the role of a wholesaler in the market?
Answer
A wholesaler buys goods in bulk from producers and sells them to retailers.
Question 24. What is the significance of the Kumbh Mela in India?
Answer
The Kumbh Mela is a significant religious event that brings millions of people together for a holy dip in the rivers, symbolizing spirituality and unity.
Short Answer Questions
Question 1. How do price changes affect the supply and demand of goods in a market?
Answer
If the price is set too high, fewer buyers may purchase, leading to a decrease in demand. On the other hand, if the price is set too low, more buyers will purchase, but the seller may raise the price to earn more, adjusting the supply accordingly.
Question 2. What are the main differences between wholesale and retail markets?
Answer
Wholesale markets involve large-scale purchases of goods from producers and are typically sold in bulk, while retail markets sell smaller quantities to individual consumers. Retailers buy from wholesalers and sell directly to customers.
Question 3. How do government controls, like price ceilings and floors, affect markets?
Answer
Price ceilings prevent sellers from charging excessively high prices, ensuring goods remain affordable for consumers. Price floors prevent prices from falling too low, ensuring producers are fairly compensated, especially in essential sectors like agriculture.
Question 4. What is the importance of guilds in ancient markets?
Answer
Guilds were organizations of traders or craftsmen that established rules, standards, and practices for their trade. They ensured fair transactions and supported each other, fostering a cooperative environment for businesses to grow.
Question 5. How does the demand and supply model work in a market?
Answer
In the demand and supply model, the price of goods is determined by the interaction between buyers’ demand and sellers’ supply. When demand exceeds supply, prices rise, and when supply exceeds demand, prices fall to balance the market.
Question 6. What role do markets play in a country’s economy?
Answer
Markets are essential for the economy as they enable the exchange of goods and services, contributing to economic growth. They facilitate the movement of resources, help create jobs, and ensure that products reach consumers efficiently.
Question 7. How does the barter system work, and why was it replaced by money?
Answer
The barter system involves exchanging goods and services directly without using money. It was replaced by money to make transactions more efficient, as money is a universally accepted medium that eliminates the need for a direct exchange of goods.
Question 8. How did markets evolve with the advent of online platforms?
Answer
Online markets enable transactions to occur remotely through websites or apps, allowing buyers to access a wider range of products and services. These platforms offer convenience, greater variety, and sometimes better prices than physical markets.
Question 9. What are domestic and international markets?
Answer
Domestic markets involve trade within a country's borders, while international markets involve the exchange of goods and services between countries. International markets are critical for accessing goods not available domestically and for expanding business opportunities globally.
Question 10. How do physical and online markets differ in terms of consumer experience?
Answer
In physical markets, consumers can see, touch, and try goods before buying, offering a direct experience. Online markets, however, provide convenience and a wider selection but lack the ability for consumers to physically inspect items before purchasing.
Question 11. What is the role of distributors in the market?
Answer
Distributors play a vital role in connecting wholesalers to retailers, ensuring goods reach their final destinations. They help manage the logistics of large-scale distribution, especially in regions where direct access to retailers is challenging.
Question 12. How does government regulation ensure fair pricing and safety in markets?
Answer
The government regulates markets by setting price limits on essential goods, ensuring the quality and safety of products, and protecting consumers. These regulations help avoid exploitation, maintain product standards, and promote consumer trust in the marketplace.
Question 13. How do buyers and sellers determine the price in a market?
Answer
Buyers and sellers determine the price in a market through negotiation, supply and demand, and mutual agreement. When many buyers and sellers interact, they help set a price that balances what buyers are willing to pay and what sellers are ready to accept.
Question 14. What role do wholesalers play in the supply chain?
Answer
Wholesalers act as a link between producers and retailers. They buy goods in large quantities from manufacturers, store them, and then supply them to retailers. This helps reduce costs, ensures product availability, and makes distribution more efficient.
Question 15. Why are BEE Star ratings important for electronic appliances?
Answer
BEE Star ratings are important because they show how energy-efficient an appliance is. Higher ratings mean lower electricity use, which saves money and reduces environmental impact. They also help consumers choose better products and push manufacturers to make more efficient appliances.
Question 16. What are the differences between wholesale and retail markets in terms of function and trade?
Answer
- Wholesale markets deal with large quantities of goods bought in bulk from producers and sold to retailers, who then sell smaller quantities to consumers in retail markets.
- Retail markets cater directly to the consumer, making goods available in smaller amounts. While wholesale markets focus on supply chain efficiency, retail markets focus on providing goods to individuals and households, supporting the final step of the distribution process.
Long Answer Questions
Question 1. How do markets contribute to the economy of a country?
Answer
- Markets play a vital role in the economy by facilitating the exchange of goods and services.
- They ensure that resources are distributed efficiently across the country, promoting trade and stimulating production.
- Markets also help generate employment opportunities, boost income generation, and support businesses by connecting them with consumers.
- Moreover, taxes collected from markets provide revenue for the government to fund public services.
Question 2. Why are price negotiations important in a market?
Answer
- Price negotiations are important because they allow buyers and sellers to agree on a fair price for goods or services, ensuring both sides benefit from the transaction.
- If the price is set too high, demand decreases, while a price set too low may lead to losses for sellers.
- Through negotiation, the price stabilizes, making the transaction mutually beneficial and maintaining a balance between supply and demand.
Question 3. How do government controls on prices affect markets?
Answer
- Government controls, like price ceilings and floors, are essential to prevent price manipulation and ensure fairness in markets.
- A price ceiling ensures that essential goods, such as medicines or food, remain affordable for consumers.
- On the other hand, price floors guarantee that producers, especially farmers, receive a fair price for their goods, protecting them from market fluctuations.
- These regulations maintain market stability and protect both consumers and producers.
Question 4. What is the role of guilds in market transactions and trade?
Answer
- Guilds were organized groups of traders and craftsmen that regulated trade in ancient markets.
- They set standards for quality, ensured fair pricing, and resolved disputes within the community.
- Guilds provided members with resources, protection, and a network for business opportunities. By promoting cooperation rather than competition, guilds played a critical role in maintaining a stable and efficient market system.
Question 5. Match the Column A with the correct option in Column B.
|
Column A |
Column B |
|
1. Physical Market |
(a) Trade that happens across countries |
|
2. Domestic Market |
(b) Transaction happens through apps or websites |
|
3. AGMARK |
(c) A large religious gathering held every six years |
|
4. Wholesale Market |
(d) Deals with large quantities of goods |
|
5. Kumbh Mela |
(e) Ensures quality of agricultural products |
Answer
|
Column A |
Column B |
|
1. Physical Market |
(b) Transaction happens through apps or websites |
|
2. Domestic Market |
(a) Trade that happens across countries |
|
3. AGMARK |
(e) Ensures quality of agricultural products |
|
4. Wholesale Market |
(d) Deals with large quantities of goods |
|
5. Kumbh Mela |
(c) A large religious gathering held every six years |
Explanations:
- 1 → b: Physical markets involve in-person transactions where buyers and sellers meet directly.
- 2 → a: Domestic markets refer to trade within a country's borders.
- 3 → e: AGMARK is a certification mark ensuring the quality of agricultural products.
- 4 → d: Wholesale markets deal with large quantities of goods sold in bulk.
- 5 → c: Kumbh Mela is a major religious gathering held every six years at four sacred river sites.
Question 6. How have physical and online markets evolved over time?
Answer
- Physical markets have been around for centuries, where buyers and sellers meet face-to-face to exchange goods. With technological advancements, online markets have emerged, enabling consumers to shop from the comfort of their homes.
- Online platforms offer convenience, a wider range of products, and competitive prices.
- However, physical markets still hold value by providing a direct sensory experience and immediate product availability, and they are ideal for certain services like tailoring or street food.
Question 7. How do markets impact people's lives on a daily basis?
Answer
- Markets are essential for people's daily needs, providing food, clothing, services, and more.
- They connect producers and consumers, allowing people to access goods they cannot produce themselves.
- Markets also foster relationships and trust, as families often rely on local grocers or tailors for regular purchases. In addition, markets provide economic opportunities and support livelihoods for millions of people involved in production, trade, and services.
Question 8. How does the government balance regulation and freedom in markets?
Answer
- The government regulates markets to ensure fairness, safety, and transparency in transactions.
- This includes setting price controls, ensuring product quality, and protecting consumers from exploitation.
- At the same time, the government allows businesses to operate freely to encourage innovation and competition.
- A balance is necessary to prevent monopolies, protect the environment, and ensure that markets remain efficient and responsive to consumer needs.
Question 9. How does the government ensure quality and safety in markets?
Answer
The government plays a vital role in ensuring the quality and safety of products in the market through various measures:
- The government establishes quality and safety standards that manufacturers must follow when producing goods and services.
- For example, in the pharmaceutical industry, it sets procedures for approving medicines and conducts sample testing to ensure they meet safety standards, protecting consumers' health.
- To address external effects, such as environmental pollution from factories, the government implements strict regulations to mitigate these negative impacts.
- It also monitors weights and measures of packaged products to ensure consumers receive the correct quantity.
Overall, the government's regulations help maintain fair practices in the market and protect consumers from exploitation.
Question 10. Explain the socio-cultural role of markets like Ima Keithal in Imphal.
Answer
Ima Keithal, also known as Mother's Market, plays a significant socio-cultural role in Imphal, Manipur. This unique market is entirely run by approximately 3000 women, who manage shops selling a variety of goods.
- Economic Impact: The market provides vital employment opportunities, serving as a primary source of income for many families.
- Cultural Exchange: It acts as a melting pot where people from diverse communities come together, fostering the exchange of ideas and traditions.
- Community Bonds: Relationships often develop between buyers and sellers, creating a sense of trust and continuity that can last for generations.
- Beyond Transactions: The market's role extends beyond mere buying and selling; it is a space for social interaction and cultural practices.
Question 11. How do online markets differ from physical markets in transactions?
Answer
Online markets and physical markets differ significantly in how transactions occur:
- Physical Interaction: In physical markets, buyers and sellers meet face-to-face to exchange goods and services.
- Convenience: Online markets allow transactions from anywhere, enabling buyers to shop from home using apps or websites.
- Product Range: Online markets offer a wider variety of goods, including items that may not be available locally.
- Payment Methods: Online transactions often involve digital payments, while physical markets typically use cash or card payments.
- Delivery: Online purchases are delivered to the buyer's location, whereas physical purchases require buyers to carry items home.
Question 12. Analyze the role of markets in connecting economic and non-economic activities.
Answer
Markets play a crucial role in connecting economic and non-economic activities such as
- Facilitating Transactions: Markets enable the exchange of goods and services between producers and consumers.
- Chain of Participants: They involve various players, including manufacturers, wholesalers, distributors, and retailers, ensuring that products reach final consumers.
- Social Interaction: Markets serve as places for people to meet, share ideas, and exchange traditions, enhancing community ties.
- Regulatory Role: Governments regulate markets to uphold quality standards and fair practices, while consumers can evaluate products through certification marks and online reviews.
- Long-lasting Relationships: Interactions in markets often lead to enduring relationships between buyers and sellers, extending beyond mere transactions.
Thus, while markets primarily drive economic activities, they also hold significant non-economic importance in people's lives.
Question 13. Evaluate the government’s role in balancing market fairness and efficiency.
Answer
Governments create rules to ensure that markets operate fairly and that consumers are not taken advantage of. However, excessive regulations can hinder market efficiency. Providing Public Goods
- Producers aim to make a profit by selling goods and services.
- Some goods, like public parks and roads, are not profitable but are essential for society.
- The government provides these public goods to ensure everyone has access.
Controlling Market Effects
- Markets can have negative impacts, such as pollution from factories.
- The government intervenes by enforcing regulations to reduce these harmful effects.
- For example, strict rules are applied to manage the production of single-use plastics.
Ensuring Quality and Safety
- The government protects consumers by ensuring that products meet quality and safety standards.
- For instance, pharmaceutical companies must follow strict procedures for drug approval and testing.
- This ensures that medicines are safe for consumers.
Controlling Prices
- The government sets price limits on essential goods to protect both consumers and producers.
- For example, maximum prices are set for lifesaving drugs, while minimum prices are established for agricultural products.
- These measures prevent exploitation and ensure fair compensation for farmers.
Conclusion
- The government plays a vital role in balancing market fairness and efficiency.
- Through regulation, it ensures that markets function smoothly while protecting consumers.