RBSE Class 7 Social Science Chapter 12 Solutions in English — Understanding Markets

Understanding Markets Class 7 Question Answer SST Chapter 12

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Class 7 SST Chapter 12 Understanding Markets Question Answer

Class 7 Social Science Chapter 12 Understanding Markets Question Answer

Understanding Markets Class 7 Questions and Answers

The Big Question (Page No. 247)

Question 1.
What are markets, and how do they function?
Answer:
Market-A market is a place where people buy and sell various goods. It is called a market. In Hindi, it is called ‘Haat’ and in Kannada, it is called marukatte.

Function of Market-
1. Every market has a buyer and a seller. They both need to agree on a price at which the transaction would take place. Price is an important feature in completing a transaction.

2. Often, the buyers and sellers negotiate and bargain to arrive at an acceptable price. Buyers and sellers negotiate until they mutually agree on a price. Only then can the transaction be completed. If the buyer and seller cannot agree on a price, the transaction cannot take place.

Question 2.
What is the role of markets in people’s lives?
Answer:
The role of markets in people’s lives is explained as follows-

1. Important role in economic life- Markets play a crucial role in people’s economic lives. Individuals depend on markets to fulfill their basic needs for goods and services, as well as other requirements.
2. Role in Social Life-Markets connect people, traditions, and ideas. On one hand, the market provides employment, becoming an important source of income for thousands of families; on the other hand, the market is a melting pot of cultures. People from different communities come together to exchange ideas and enjoy shared traditions.

Question 3.
What role does the government play in markets?
Answer:
Government’s Role in the Market-

1. The government monitors the interaction between consumers and producers and ensures fair price determination.
2. The government controls the prices of certain goods. For example, it sets the maximum price that a seller can charge.
3. The government also sets minimum wages for the work done by employees to ensure that employers pay them fairly.
4. The government ensures that manufacturers adhere to necessary quality and safety standards when producing goods and providing services.
5. The government plays a crucial role in controlling such effects of market that pollutes the environment and poses health risks to consumers.
6. It plays a vital role in providing public goods and services that the market does not supply, thereby ensuring the welfare of all.

Question 4.
How can consumers assess the quality of goods and services they purchase?
Answer:
Consumers can assess the quality of the goods and services they purchase based on special quality marks provided by the government, such as-

1. FSSAI-Food Safety & Standards Authority of India, and its symbol on the food packets and cartons indicates that food has been tested by the government and is safe to consume.
2. ISI-Indian Standards Institution issued by the Bureau of India Standards. This symbol is generally present on electrical appliances, construction materials, automotive tires, paper, etc. This ensures quality and that the product is safe to use.
3. AGMARK-It is the certification mark for agricultural products like vegetables, fruits, cereals, pulses, spices, honey, etc.
4. BEE STAR rating-Electronics items like TVs, laptops, air conditioners, etc. have BEE STAR rating. These ratings are printed on the product package as stars. Higher stars indicate that the appliance uses less energy and electricity.
5. Other factors-In addition, product reputation and online reviews of goods and services also influence consumer decisions.

Let’s Explore (Page No.251)

Question 1.
Can you imagine what this bazaar must have looked like during its peak?
Answer:
The Hampi market in Karnataka, at the height of its peak, must have been something like this-

1. Here, craftsmen would have worked in the streets, making gold jewellery and gewgaws, and selling them along with all kinds of rubies, diamonds, and pearls.
2. There would have been a separate market for cloth merchants.
3. There would have been different markets for various types of products, such as a cotton market and a grain market.
4. The market would have traded in grains, seeds, milk, oil, silk, and various other products.
5. Therefore, it is clear that due to the trade of diverse products and the presence of local and foreign merchants and consumers, the market would have reached the peak of its prosperity at that time.

Question 2.
Do you know of any old markets from your state? How would they be similar or different from today’s markets? Discuss with elders in the family and community.
Answer:
Students should find out about some of the old markets in their state by discussing with their family members and senior members of their community.

Think About It (PageNo. 251)

Question.
Can you think of a type of market where negotiation is less common and why?
Answer:

• There is no bargaining in online marketplaces because the buyer and seller do not meet directly.
• In places like supermarkets such as Big Bazaar, D-Mart, or Smart Bazaar, there is no bargaining. The prices are fixed, and the items are labeled.

Think About It (PageNo. 251)

Question.
Vegetables are sold cheaper late at night at the weekly market compared to during the day. Why do you think this is so? Garment stores offer heavy discounts on woollen clothing at the end of the winter season. Why does this happen?
Answer:
In weekly markets, vegetables are cheaper late at night than during the day because throughout the day, consumers pick and choose the best vegetables, leaving behind those of lower quality. Secondly, vendors find it more advantageous to sell the remaining vegetables at night to avoid the hassle of storing them. Therefore, they are compelled to sell them at lower prices than during the day.

Similarly, heavy discounts are offered on woolen clothing at the end of the winter season because there will be no further demand for these clothes, and they would have to be stored in stock for the entire year. Therefore, they find it more advantageous to sell them at heavy discounts so that the income generated can be used to purchase other clothing items, which can then be sold throughout the year to earn a profit. This profit is greater than the loss incurred due to the discounts offered.

Think About It (PageNo. 255)

Question 1.
What do you think are the pros and cons of online and physical shopping, respectively? Explore this question from the point of view of both sellers and buyers.
Answer:
(a) From the buyer’s point of view, Online shopping involves making purchases remotely. It allows you to shop from anywhere, right from the comfort of your home. However, it can raise some concerns regarding privacy and security.

On the other hand, physical shopping offers the opportunity to see and feel the product before buying it immediately. The buyer has direct contact with the seller. In-person purchases are generally considered more secure than online purchases because payment and goods are exchanged simultaneously.

(b) From the seller’s point of view, online selling offers advantages such as access to a wider customer base and lower operating costs, but also presents disadvantages like increased competition, the risk of fraud, and logistical complexities. On the other hand, direct selling allows for building direct relationships with customers and providing better customer service, but it involves limited reach and higher costs.

Question 2.
Some services require in-person contact, like tailoring, and cannot be provided online. Can you suggest other services where physical markets are needed?
Answer:
We need a physical market to buy gold, silver, and diamond jewellery because we cannot buy these online. Similarly, services like those offered by salons and beauty parlors cannot be provided online.

Think About It (PageNo. 263)

Question.
We have discussed different dimensions of markets. Can we imagine what life might be like without markets? What would happen if farmers did not bring rice, wheat, dal, vegetables, and fruits to the market? What would happen if the producers of cloth in Surat could not procure inputs like cotton from markets?
Answer:
Without markets, our lives would become difficult. Many of the conveniences of our daily lives would disappear without them.

For example, if farmers didn’t bring rice, wheat, pulses, vegetables, and fruits to the market, we would have to go to the villages to get these things from the farmers. We would have to find out which farmer produced wheat and which one produced pulses and vegetables. We would need to know which fruits are grown in which region and which crops are harvested at what time of year. Even after all this, we would still face many other difficulties in obtaining these goods.

On the other hand, without markets, farmers would also face difficulties selling their crops because there would be a lack of consumers to buy their produce. Secondly, fruits and vegetables would spoil if they weren’t sold on time. Consequently, they would be forced to sell these goods at lower prices.

It is clear that the lack of a market will lead to difficulties in the exchange of goods and problems in determining their prices. Furthermore, the government will have no control over the buying and selling of these goods.

The same situation will apply to the merchants of Surat. They will have to travel long distances to buy cotton from farmers, facing numerous difficulties in the process.

Think About It (PageNo. 268)

Question.
You want to buy new marbles for the competition. You have ₹ 150 saved up. You go to a shop to buy the marbles. What are the qualities you would look for in the marbles so that you can win the competition?
Answer:
We will buy marbles after considering their size, toughness, price, attractive colors, and other qualities.

Class 7 From Understanding Markets Question Answer

Question 1.
What are the main features of a market? Recall a recent visit to a market to purchase a product. What are the different features of a market that you observed during this visit?
Answer:
Main features of a market are as follows-

1. Presence of a buyer and a seller-Every market has a buyer and a seller.
2. Availability of goods and services- Goods and services become available to individuals, households, and businesses through markets.
3. Agreement on a price. For a transaction to take place in the market, both the buyer and the seller need to agree on a price for the commodity. Price is an important feature in completing a transaction.
4. Negotiation and Bargaining-Often, the buyers and sellers negotiate and bargain to arrive at an acceptable price. Recently, when we went to the market, we observed all four of the mentioned features of the market.

Question 2.
Remember the epigraph from a famous economist at the beginning of the chapter? Discuss its relevance in the context of the chapter you have read.
Answer:
At the beginning of this chapter, Adam Smith’s epigraph says that ‘Prosperity emanates from the market that develops when people need goods and services that they can’t create themselves.’ This means that when people in a market need goods manufactured in distant regions, from other markets, and from foreign countries, the volume of goods and services traded in that market increases. This leads to the prosperity of that market. This statement remains relevant even today.

Question 3.
In the example of buying and selling of guavas, imagine that the seller is getting a good price and is able to make a profit. He will try to get more guavas from farmers to be able to sell them at the same price and increase his earnings. What is the farmer likely to do in this kind of a situation? Do you think he will start thinking about the demand for guavas in the next season? What is likely to be his response?
Answer:
In this situation, the former can estimate the approximate quantity of guavas the buyer needs and will then supply that quantity to the market in the future.

This will help in determining the price of the guavas based on the quantity supplied by the farmer and the price expected by the buyer. Seeing the high demand, the farmer can demand a much higher price than the predetermined price instead of selling at the previously agreed-upon price.

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

Answer:

Question 5.
Prices are generally determined by the interaction between demand from buyers and supply by sellers. Can you think of products where prices are high despite lesser number of buyers demanding the product? What could be the reasons for that?
Answer:
Yes, there are several products where prices remain high even though there are only a few buyers.

For example-
1. Luxury goods-Such as rare diamonds, unique works of art, and high-end luxury cars. Although the demand for these items may be low, they are rare, and their high price attracts consumers due to their exceptional qualities and prestige.

2. High-tech products-Certain gadgets or software that offer specialized features can be expensive even when demand is low. The reasons for this include technological innovation, high manufacturing costs, and unique benefits.

The main reasons for the high price are-

• Scarcity,
• high production costs,
• unique benefits, and
• controlled supply.

Question 6.
Look at the real-life situation that a retail seller of vegetables encountered: A family came to shop for vegetables. The price of beans that the seller on the cart was offering was ₹ 30/-kg. The lady started to bargain with the seller to bring the price down to ₹ 25/- kg. The seller protested and refused to sell at that price, saying he would make a loss at that price. The lady walks away. The family then goes to a super bazaar nearby. They buy vegetables in the super bazaar where they pay ₹ 40/- kg for the beans that are neatly packed in a plastic bag. What are the reasons that the family does this? Are there factors that affect buying and selling which are not directly connected to price?
Answer:
(i) In super bazaar, items are sold pre-packaged, and prices are fixed; bargaining is uncommon or non-existent. Therefore, items are purchased at the price displayed.

(ii) Besides prices, other factors also influence buying and selling in super bazaar. Here, the goods are packed in a proper way, which makes then look attractive. They then come to be regarded as good quality. Here, the prices of goods are predetermined by the owner, and the items are sold by employees who do not have the authority to negotiate prices. Consequently, the family had to buy the beans at the predetermined price.

(iii) In a supermarket, the seller and buyer of goods do not interact directly; instead, the buyer interacts with a store employee. The buyer knows that this employee does not have the authority to negotiate prices. Consequently, the buyer has to purchase the goods at the predetermined price.

Question 7.
There are some districts in India that are famous for growing tomatoes. However, during some seasons, the situation is not good for farmers. With a large quantity of harvest, there are reports of farmers throwing away their produce, and all their hard work going to waste. Why do you think farmers do this? What role can wholesalers play in such situations? What are the possible ways of ensuring that the tomatoes are not wasted, and the farmers are also not at a loss?
Answer:
The reason, farmers are throwing away their tomato crops-In our opinion, farmers do this because wholesalers offer them very low prices for the tomatoes at that time, which doesn’t even cover the farmers’ costs. Since tomatoes spoil quickly, farmers sometimes have to throw away their produce.

The role of wholesalers: In this situation, wholesalers can play the following role-
1. When there is a surplus of tomatoes and farmers are forced to throw them away due to low prices, wholesalers can buy large quantities of the produce and transport them to areas where there is higher demand, as tomatoes are not grown at the same time in all regions of India. Consumers can also gather information about such markets and arrange for the transportation of tomatoes to those areas, selling them to wholesalers and retailers there.

2. They can break down the products into smaller batches and deliver them to retailers, making the distribution process more efficient. Wholesalers can also handle transportation and logistics.

3. They can help promote the increased production of tomatoes and boost demand.
4. By doing so, they can help farmers in selling their tomatoes. They can take on some risk by purchasing tomatoes from farmers at a fair price and arranging for their transportation and sale in other locations. This would prevent losses for the farmers and prevent the crop from going to waste.

Question 8.
Have you heard about or visited a school carnival /fair organized by your school or any other school? Discuss with your friends and teachers about the kind of activities organized by students there. How do they conduct selling and negotiation with the buyers?
Answer:
Students should find the answer themselves by discussing it with their friends and teachers.

Question 9.
Choose any 5 products and check out the label with the certification signs discussed in the chapter. Did you find products that did not have a logo? Why do you think this is so?
Answer:
Five products are-

1. Fruits
2. Honey
3. Milk
4. Spices
5. Pulses.

The standard mark for fruits, honey, pulses, and spices is ‘Agmark’, and the standard mark for milk is ‘FSSAI. Yes, we found some products that did not have a logo. The absence of a standard mark on a product indicates that the product may not be safe for consumption and does not meet the minimum quality standards.

Question 10.
You and your classmates have manufactured a soap bar. Design a label for its packaging. What, in your opinion, should be mentioned on the label for the consumer to know the product better?
Answer:
Students should design their own labels for their soap product. This label should include the weight of the soap, the quantities of each ingredient used, the manufacturing date, and the expiry date. This will help consumers to examine the product more effectively