Experts have designed these Class 7 SST Notes Chapter 12 Understanding MarketsClass 7 Notes for effective learning.
Class 7 Understanding Markets Notes
Class 7 SST Chapter 12 Understanding Markets Notes
Class 7 SST Chapter 12 Notes – Understanding Markets Notes Class 7
→ Need; Needs are essential requirements for survival and well-being, such as food, water, clothing, shelter and healthcare.
→ Wants: Wants are desires for non-essential goods and services that enhance comfort and quality of life, such as, entertainment, luxury items etc.
→ Household: A household is a group of people living together in a residence who share resources and expenses.
→ Individuals: Individuals are single human beings, different from a group, community, or society, each with their own identity, needs and responsibilities.
→ Business Businesses are organisations or entities engaged in the production, distribution, or sale of goods and services to earn a profit.
→ Trade: Trade is the exchange of goods and services between individuals, businesses or countries for money.
→ Price: Price is the amount of money required to purchase a good or service.
→ Transaction: A transaction is the exchange of goods, services or money between two or more parties, typically involving a buyer or seller.
→ Discount: A discount is a reduction in the original price of a product or service offered to attract customers or promote sale.
→ Profit: Profit is financial gain earned by a business or individual when total sales (revenue) exceeds total cost and expense.
→ Haats: Haats is a term in Hindi for weekly markets.
→ Manufacturers: A manufacture is a person or company that produces goods using raw materials, labour and machinery.
→ Inputs for production: Inputs for production are the resources such as raw materials, labour, capital, and technology, used to produce goods or services.
→ Export: Sale of goods to other countries.
→ Import: Purchase of goods from other countries.
→ Cold Storage: Refrigerated godowns where perishable goods are preserved to be sold later.
→ Distributors: Companies or persons that transports finished goods from the producer or manufacturer to the wholesalers or retailers.
→ Aggregators: Online companies (On website or on mobile APP) which gathers information about various products from multiple sellers so that buyer could compare and buy at the best price.
→ Consumers: Persons who buy or sell things for their own use.
→ Wholesaler: A person or company that sells goods in large quantities.
→ Retailer: A person or company who sells goods directly to the end consumers.
→ Demand: It refers to the market’s desire to purchase the good or service.
→ Supply: It refers to the market’s desire to sell the good or service.
→ Public Goods: The goods meant for everyone’s use and one person’s consumption doesn’t diminish the availability for others.
→ FSSAI: Food products bearing FSSAI (Food Safety & Standards Authority of India) are tested and certified by the government and are safe to consume.
→ ISI: ISI mark is issued by the Bureau of India Standards (BIS) generally for electric appliances, construction materials, automotive goods, paper etc. ISI marked products ensure quality and give assurance that they are safe to use.
→ AGMARK: Certification for agriculture products.
→ BEE: It stands for Bureau of Energy Efficiency and used in electronic equipment and gadgets, such as, air conditioners, refrigerators, laptops, TVs, geysers etc. A printed sticker is affixed on every product that displays its rating. In all there are five stars. Higher stars indicate that the appliances use less energy and electricity.
Understanding Markets Class 7th Notes
- People need goods and services in their daily lives to fulfill their needs and requirements.
- The three sectors primary, secondary and tertiary make these goods and services available to them.
WHAT IS A MARKET?
- A market is a place or online platform where buyers and sellers exchange goods, services or resources for money.
- Markets fulfill people’s needs for goods and services.
- Markets also bring people, traditions and ideas together.
- Markets have existed for centuries, such as the glorious Hampi Bazaar in Karnataka.
- Markets contribute to the prosperity of the economy.
- Every market has a buyer and a seller.
- Both must agree on a price to complete a transaction.
- If the buyer finds the price unreasonable, they may negotiate.
- If the seller still sees a profit, the sale may conclude; otherwise, it will not.
PRICES AND MARKETS
- Prices and markets are closely linked to each other.
- Markets that offer goods and services in abundance at reasonable prices tend to thrive.
- In contrast, markets with high prices do not receive a positive response from all sections of society.
MARKETS AROUND US
- There are various kinds of markets present everywhere.
Physical and Online Markets
- A physical market is a tangible location where buyers and sellers meet to exchange goods and services for money.
- Apart from physical markets, people also buy and sell goods and services through online shopping using websites or Apps on their phones and computers-
- Online shopping has also made it easier for manufacturers to buy components used in manufacturing.
- E-payments have made buying and selling easier for both buyers and sellers.
Domestic and International Markets
- A domestic market is a marketplace where goods and services are bought and sold within a single country.
- An international market is a marketplace where goods and services are traded between different countries.
Wholesale and Retail Markets
- A Wholesale market is where goods are sold in large quantities to wholesalers at lower prices.
- A retail market is where goods are sold in smaller quantities directly to consumers at market prices.
THE ROLE OF MARKETS IN PEOPLE’S LIVES
- Markets play an important role in people’s lives and the economy of a nation.
- Markets enable transactions between buyers and sellers.
- They are places where people can access the goods and services they need but cannot produce themselves.
HOW MARKETS BENEFIT SOCIETY
- With the demand for goods in the market, producers plan what to manufacture and in what quantities and of what quality. For instance, energy efficient air conditioners, refrigerators etc.
- Although the buying and selling of goods is an economic activity, trust between buyers and sellers fosters personal relationships for long term, giving it non-economic significance as well.
GOVERNMENT’S ROLE IN THE MARKET
- Government plays a key role to control prices of certain goods like agricultural produce (grains, pulses, vegetables, sugar etc), few life saving medicines and other essential products.
- Markets operate on the concept of demand and supply.
- Sometimes, producers and wholesalers hoard goods that are high in demand to create artificial scarcity and exploit consumers.
- The government’s role is to regulate such situations to ensure that end consumers are not exploited or forced to pay unfair prices.
- For example, government sets a minimum price at which few essential agricultural products will be sold in the market to protect the interests of farmers.
Controlling Prices for Protecting Buyer and Sellers
- To protect consumers’ interests, the government has made it mandatory for manufacturers to set a Maximum Retail Price (MRP) for their goods and display it on the packaging.
- However, MRPs are set with the intention that producers earn a reasonable profit while consumers do not have to pay extra.
Ensuring Quality and Safety Standards
- To ensure the welfare of consumers, the government has established quality and safety standards for manufactured goods.
- For example, medicines produced by pharmaceutical companies are checked for their quality by government agencies.
Mitigating the External Effects of Markets
- Besides selling and buying of goods the government also plays an important role in regulating them and controlling pollution.
- Some goods manufactured and sold in the market cause environmental pollution.
- Government keeps check for such types of industries.
- If required government sets standards for their production and may also ban their production.
Providing Public Goods
- The government provides certain essential goods and services to citizens as part of their fundamental right.
- Some of these goods and services, such as parks, public facilities and streetlights, do not generate much profit as they are meant for public welfare.
How can Consumers Assess the Quality of Products and Services?
- To maintain the standard of goods and food, the government has implemented strict rules that producers and manufacturers must follow.
- Various government bodies have been assigned to monitor whether manufacturers and producers comply with these regulations.
- This ensures that consumers can buy goods without fear of purchasing substandard products.
Main safety standard bodies in India are:
- FSSAI (Food Safety and Standards Authority of India): Government makes sure that FSSAI marked food items are of standard quality and are safe to consume.
- ISI Mark (Indian Standards Institution): ISI mark is issued by BIS (Bureau of Indian Standards). Government makes sure that ISI mark electrical, construction, automotive and other industrial items used for household by consumers are of standard quality and safe to use.
- AGMARK (Agriculture Mark): Government makes sure that AGMARK marked products, produced by agriculture like grains, pulses, cereals, vegetables, fruits etc, are safe to consume.
- BEE (Bureau of Energy Efficiency): BEE is marked on electronic/electrical products, like AC, Refrigerators, TVs etc, so that consumers can know how much power will be consumed by using them. Consumers want to buy the product with least power consuming or energy efficient equipments.