Understanding Markets Class 7 Questions and Answers Social Science Chapter 12

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Class 7 Social Science Chapter 12 Question Answer Understanding Markets

NCERT Class 7 Social Science Chapter 12 Understanding Markets Questions and Answers Solutions

Understanding Markets Class 7 Question Answer (In-Text)

The Big Questions? (Page 247)

Question 1.
What are markets and how do they function?
Answer:
Markets are places where people buy and sell things. These things can be goods (like fruits, clothes, or toys) or services (like haircuts or car repairs). A market can be a physical place like a shop, a street market, or even an online store. Markets work through the interaction of buyers and sellers. Sellers offer products or services, and buyers choose what they want to buy based on the price and quality. The price is usually decided based on supply (how much of something is available) and demand (how much people want it). When demand is high and supply is low, prices go up. When supply is high and demand is low, prices go down. So, markets help in the exchange of goods and services and allow people to meet their needs.

Question 2.
What is the role of markets in people’s lives?
Answer:
Markets play an important role in people’s lives by helping them meet their daily needs. People go to markets to buy food, clothes, and other goods, and also to get services like haircuts or repairs. Sellers earn money by offering products or services, while buyers choose what they need. Markets also give people choices, help set fair prices through supply and demand, and support local jobs and businesses. Whether it’s a small shop, a big mall, or an online store, markets connect people and support the economy in many ways.

Question 3.
What role does the government play in markets?
Answer:
The government plays a key role in markets to ensure they work fairly and smoothly. It makes rules to have fair dealing and protect both buyers and sellers from cheating. The government checks the quality of goods, controls prices of essential items, and collects taxes from businesses. It also provides support to small businesses and farmers. In some cases, the government steps in to supply important goods or services like food, water, or healthcare. By doing all this, the government helps markets stay safe, fair, and beneficial for everyone in society.

Question 4.
How can consumers assess the quality of goods and services they purchase?
Answer:
Consumers can assess the quality of goods and services in several ways. They can check labels for details like expiry dates, ingredients, and certifications (such as ISI, FSSAI or AGMARK marks in India). Reading reviews, asking for recommendations, or comparing products before buying also helps. For services, customers can look at ratings, past experiences, and feedback from others. Trying a sample or asking questions can give more clarity. Being aware of consumer rights and using them when needed also helps ensure that they receive good quality products and services.

Let’s Explore

Question 1.
Can you imagine what this bazaar must have looked like during its peak? (Page 251)

Answer:
Yes, I can definitely imagine it! It is Hampi Bazaar. During its peak it must’ve been a feast for the senses. During 14th to 16th century the height of the Vijayanagara Empire this was no ordinary street market. It had massive stone pavilions lining both sides of a broad street, each with intricately carved pillars used as shops by jewellers, spice merchants, and cloth dealers. Shimmering goods could have been seen everywhere silks from the South, pearls from the Gulf, horses from Arabia, spices piled high in woven baskets, and gleaming gold and gems. Foreign travellers even wrote about how rich the market was! It’s honestly wild to think about how alive that place must’ve been.

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. (Page 251)
Answer:
Meena Bazaar at the Red Fort in New Delhi, is an example of an old Bazaar. It gives us a vivid picture of how old markets operated, especially during the Mughal era. Even today that bazaar is lively. During those times it was meant for the royal people only. But today it is open to everyone and lots of tourists who visit the Red Fort buy silks, handicrafts, and rare artifacts from there.

Question 3.
Observe the illustration. What are these people discussing? Imagine you and your partner as a buyer and a seller of guavas. Prepare a set of dialogues between both of you and present it in your class as a skit. (Page 251)

Answer:
Here is a skit with dialogues between two students posing as buyer and seller.
Characters:

• Vendor (Student 1) – a cheerful fruit seller with a cart full of guavas
• Customer (Student 2) – a witty, bargain – loving buyer (Scene opens: A busy street comer. Raju is arranging bright green guavas on his cart and shouting his sales pitch.)
• Vendor (Student 1): (cheerfully) “Buy! Fresh guavas! Sweet like honey, soft like butter! Just 80 rupees per kilo!”
• Customer (Student 2): (walking up, eyeing the guavas) “Hmm… they look nice. But 80 rupees? That’s too much! Give it for 50.”
• Vendor (Student 1): (slightly dramatic) “50? Madam, these aren’t just guavas, they’re Kohinoors! Brought straight from Allahabad! You won’t get this taste anywhere else!”
• Customer (Student 2): (teasing) Guavas toh sabzi mandi mein bhi milte hain. You’re charging like you’ve got them from Paris!”
• Vendor (Student 1): (smirking) “Paris ke nahi, par pyaar se diye hain! Okay okay, specially for you – 75.”
• Customer (Student 2): (smirks back) “Still too high. Let’s make it fair—60 and 111 take one full kilo. Final offer!”
• Vendor (Student 1): (pretends to think deeply, then smiles). “Madamji, you bargain better than my mother! Theek hai, deal done. 60 rupees, but only because you’ve got a smile that matches the guavas!”
• Customer (Student 2): (grinning) “Then pack them up before I change my mind!” (They laugh. Raju packs the guavas, Anita hands over money. They wave goodbye.)
Together (as the scene ends): “In every market, there’s a little drama and a lot of fun!”

Question 4.
Observe the diagram and describe the flow of goods from the manufacturer/ producer to the consumer. What is the role of the wholesaler and the retailer in the flow? (Page 257)

Answer:
1. Manufacturer/producer: creates the product, either by sourcing raw materials and assembling them or by cultivating/producing them (like in agriculture or manufacturing). Goods are usually produced in large quantities.

2. Wholesaler buys goods in bulk from the manufacturer. Stores goods in large warehouses. Then sells large quantities into smaller lots suitable for retailers. Wholesalers often serve as a bridge between manufacturers and multiple retailers, helping streamline distribution.

3. Retailer buys goods in smaller quantities from wholesalers (or sometimes directly from manufacturers). Sells directly to the final consumer. Adds value through customer service, marketing, location convenience, and product assortment.

4. Consumer/Customer is the final end- user who purchases the product for personal use.

Question 5.
Ask your nearest retailer about a product, its place of origin, and the chain of suppliers in the process of the product reaching the shop. Trace this using a flow chart like Fig. 12.11 and share it in class. (Page 262)
Answer:
Product: Packet of Biscuits
Place of Origin: Factory in Punjab, India
Chain of Suppliers:

Question 6.
Consumers prefer to buy refrigerators that use less electricity. When a large number of consumers begin to ask for refrigerators that use less electricity, what do you think happens in the network you saw in Fig. 12.11? (Page 263)
Answer:
When a large number of consumers prefer refrigerators that use less electricity, the entire market network responds:

• Manufacturers begin to produce more energy-efficient models to meet demand.
• Retailers stock and promote these models more actively.
• Suppliers adjust the raw materials and parts (like efficient compressors) accordingly.
• Advertising highlights energy-saving features to attract buyers.
• Government may support this trend with energy ratings and incentives. Overall, consumers’ demand drive the market toward eco-friendly, energy¬saving appliances, influencing the entire supply chain.

Question 7.
Have you observed any such practices in your community or neighbourhood? Describe the practice as a drawing or in a short paragraph.(Page 265)
Answer:
Yes, I have observed such a practice in my neighbourhood. There is a vegetable vendor who always adds a small bunch of fresh coriander leaves and a few green chillies for free when customers buy vegetables from him. He does this as a friendly gesture to build goodwill and retain his regular customers. This small act makes buyers feel valued and encourages them to return to him instead of going to other vendors.

Question 8.
Onions are an important part of the cuisine in most parts of India. In some seasons, the supply of onions comes down in the market. What do you think happens to the price of onions when this happens? (Page 266)
Answer:
When the supply of onions decreases in the market, the price of onions increases. This happens because the demand remains the same or even grows, but there are fewer onions available. As a result, sellers charge more, and onions become more expensive for consumers. This is an example of how supply and demand affect prices.

Question 9.
What will happen if the people supplying onions do not bring the required quantities to the market? What do you think the government should do in this situation? (Page 266)
Answer:
If the people supplying onions do not bring the required quantities to the market, there will be a shortage, leading to a sharp increase in prices. This can make onions unaffordable for many people.
In this situation, the government should:

• Monitor hoarding and prevent black marketing.
• Import onions from other regions or countries to balance the supply.
• Release buffer stock if available.
• Support farmers with better storage and transport to ensure steady supply.
  These steps can help stabilise prices and ensure availability for all.

Question 10.
Check out the BEE Star labels on the electronic dexnces in your home and make a chart of all the devices in an increasing order of their energy efficiency. (Page 269)
Answer:
(Suggestive answer, students should check electronic devices at home and answer the question.)
Here is a chart of the electronic devices in my home arranged in increasing order of their energy efficiency (from lowest to highest star rating):

• Air conditioner 2 star,
• Washing machine 3 star,
• Geyser 3 star
• Refrigerator 5 star
  Note: A higher BEE star rating means better energy efficiency, which helps save electricity and reduce bills.

Think about it

Question 1.
Can you think of a type of market where negotiation is less common and why? (Page 252)
Answer:
Yes, malls and high-end retail stores are examples of markets where negotiation is less common. This is because:

• Prices are fixed and barcoded, often printed on packaging.
• Products are branded, and prices are set by companies.
• The shopping experience is more formal, and staff are not authorised to change prices.
• Customers in these markets usually expect convenience and quality rather than bargaining.
• In contrast, negotiation, is common in local markets or street stalls where pricing is more flexible.

Question 2.
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 heaxxy discounts on woollen clothing at the end of the winter season. Why does this happen? ‘(Page 254)
Answer:
1. Vegetables are sold cheaper late at night at the weekly market because:

• Vendors want to clear out remaining stock before the market closes.
• Vegetables are perishable, so sellers reduce prices to avoid waste.
• There are fewer customers at night, so lower prices attract more buyers.

2. Garment stores offer heavy discounts on woollen clothing at the end of the winter season because:

• Demand for woollens drops as the season ends.
• Shops want to clear old stock to make room for summer clothes.
• Offering discounts helps increase sales and reduce unsold stock.
  Both cases show how supply, demand, and timing affect pricing in the market.

Question 3.
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. (Page 255)
Answer:
Pros and Cons of Online vs. Physical Shopping.
From the Buyer’s Perspective:

Online Shopping

• Pros: Convenient, can shop anytime, home delivery, wide variety and attractive offers
• Cons: Cannot physically check products, possible delivery delays, risk of online fraud or scams

Physical Shopping

• Pros: Can see and try products before buying, instant purchase and possession, personal interaction with sellers
• Cons: Time-consuming, limited choices, Hard to compare prices quickly.

From the Seller’s Perspective:

Online Selling

• Pros: Wider customer reach, lower rental or shop maintenance costs, Open 24/7.
• Cons: High competition, shipping and logistics costs, risk of frequent returns and customer complaints

Physical Selling

• Pros: Direct contact with customers, builds trust and loyalty, fewer returns
• Cons: Limited to local buyers, higher expenses (rent, electricity, staff), dependent on customer footfall.

Question 4.
Some services require in-person contact like tailoring and cannot be promded online. Can you suggest other services where physical markets are needed? (Page 255)
Answer:
Yes, here are some other services where physical markets are needed because they require in-person contact or interaction:

• Tailoring and Alteration Services – Requires body measurements and fittings.
• Haircut and Beauty Services – Needs physical presence for grooming.
• Medical Services (clinics, hospitals) – Diagnosis, treatment, and physical exams must be done in person.
• Repair Services (electronics, vehicles) – Physical inspection and hands-on work required.
• Food Services (restaurants, street food) – Dining experience and freshly prepared food.
• Construction and Home Services – Includes plumbers, electricians, carpenters, etc.
• Education and Coaching Centres – Some learning benefits from face-to- face teaching.
• Entertainment (theatres, amusement parks) – Involves physical experience and presence.
  These services depend on human interaction, tools, or hands-on work, making them hard to shift entirely online.

Question 5.
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? (Page 263)
Answer:
Life without markets would be very difficult. Markets connect producers, sellers, and consumers, making goods available to everyone.
If farmers did not bring rice, wheat, dal, vegetables, and fruits to the market, people in cities and towns would not have access to food, leading to shortages, hunger, and high prices. If producers of cloth in Surat could not get inputs like cotton, they wouldn’t be able to manufacture fabric, affecting jobs, exports, and clothing supply across the country. Markets play a crucial role in trade, live-lihoods, and everyday life without them, the economy and society would struggle to function smoothly.

Question 6.
What are the other areas where you can see the government being involved in the markets? (Page 267)
Answer:
The government is involved in many areas of the market to ensure fairness, safety, and development. Some key areas include:

• Price Control: Sets prices for essential items like medicines, LPG, and food grains through subsidies or support prices.
• Public Distribution System (PDS): Provides food grains at low cost to poor families through ration shops.
• Taxation and Regulation: Imposes GST, income tax, and monitors market practices to prevent cheating, black marketing, or hoarding.
• Infrastructure Development: Builds roads, transport systems, cold storage, and marketplaces to support trade and farmers.
• Consumer Protection: Enforces laws to ensure product quality, fair pricing, and resolve disputes through consumer courts.
• Support for Farmers and Small Businesses: Offers MSP (Minimum Support Price), loans, and schemes for growth and market access.
• Monitoring Imports and Exports: Regulates international trade to protect local producers and control inflation. The government’s role ensures that the market functions smoothly, fairly, and benefits all sections of society.

Question 7.
Are there areas where government intervention needs to be reduced? Discuss with family or relatives. (Page 267)
Answer:
Yes, there are areas where excessive government intervention can sometimes slow down growth, reduce efficiency, or limit competition.
While government involvement is crucial for fairness and protection, reducing interference in non-essential or over-regulated areas can boost market freedom, innovation, and efficiency, benefiting both producers and consumers.

Question 8.
There is a marbles competition in your neighbourhood with the team in the next street. 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? (Page 268)
Answer:
To win a marble competition, I would look for the following qualities.in the marbles:

• Weight and Balance: A slightly heavier marble can strike others more effectively without bouncing off.
• Smooth Surface: Ensures consistent rolling and better control.
• Roundness: Perfectly round marbles roll more predictably.
• Size: A slightly larger shooter marble (also called a “taw”) can give better accuracy and power.
• Durability: Strong marbles don’t chip or crack easily during play.
• Grip or Texture: Just enough surface grip to control shots without slipping. And most important, the marbles should be worth the price.

Class 7 SST Chapter 12 Understanding Markets Question Answer (Exercise)

Questions and Activities (Page 271-272)

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:

• Buyers and Sellers: A market is a place where buyers and sellers come together to exchange goods or services.
• Goods and Services: A wide range of products or services are available for sale.
• Price Determination: Prices are decided based on demand and supply, and sometimes through bargaining.
• Payment and Exchange: Goods are exchanged for money or other goods.
• Competition: Multiple sellers offer similar products, creating competition.
• Location: Can be physical (like a vegetable market) or virtual (like online shopping platforms).

Last week, I visited the local vegetable market to buy tomatoes and potatoes. The market was crowded with many vendors selling fresh vegetables. Prices varied slightly from stall to stall. Some sellers offered free coriander with bulk purchases. I noticed people bargaining, comparing prices, and choosing fresh produce carefully. The environment was lively, with sounds of sellers calling out prices and customers negotiating. It was a perfect example of a traditional market with direct interaction between buyers and sellers.

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:
This quote is deeply relevant to the chapter as it reflects the central idea of markets. The quote serves as a perfect introduction to the chapter, emphasising how markets are essential for economic and social life by enabling exchange, cooperation, and growth.

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 farmer will observe that sellers are purchasing more guavas at a profitable price. This indicates a strong demand for guavas in the market. As a result, the farmer is likely to consider this trend and plan accordingly for the next season.
Yes, the farmer will definitely start thinking about the demand for guavas in the upcoming season. Observing that guavas are selling well, he will be encouraged to grow more guavas in order to take advantage of the demand and earn higher profits.
The farmer’s likely response will be to allocate more resources—like land, time, and labour to grow guavas. He might also invest in better farming techniques or inputs to increase production and ensure a good supply in the future, expecting the demand and prices to remain favourable.

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

Answer:

Markets	Criteria
Physical market	Requires physical presence of buyers and seller
Online market	Buyers and sellers meet virtually and can transact at any time
Domestic market	Lies within the boundaries of a nation
International market	Goods and services flow outside the nation’s boundaries
Wholesale market	Deals in bulk quantities
Retail market	Serves the final consumers with goods and services

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, products like luxury watches, designer clothes, and sports cars are expensive even though not many people buy them. Reasons:

• They are rare or made in limited numbers.
• They are made with costly materials.
• They are seen as status symbols.
• Big brands charge more due to their name.

So, even with fewer buyers, the prices stay high because of their special value and limited 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 is 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:
Yes, several factors beyond price influence buying decisions:

• Perceived hygiene and cleanliness in a supermarket.
• Packaging and convenience of shopping under one roof.
• Trust in quality and standardised weights.
• Environment and experience, like air-conditioning and organised layout, influence comfort.
• Status or habit, as some may prefer ‘ branded stores over street vendors despite higher prices.

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:
Farmers may throw away excess produce because:

• Prices fall drastically due to oversupply.
• There is lack of storage or availability of transport to reach other markets.
• The produce is perishable and cannot be held for long.

Wholesalers can help by:

• Buying and storing in cold storage.
• Connecting farmers to distant markets.
• Organising transportation and bulk distribution.
• Other possible solutions to this situation are:
• Building local processing units for tomato-based products.
• Government or private investment in cold chains and warehouses.
• Ensuring better price support and market access via cooperatives or digital platforms.

Question 8.
Have you heard about or visited a school camival/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:
Yes, school carnivals often include:

• Stalls selling handmade crafts, snacks, games, or clothes.
• Students act as sellers, set prices, and promote their products.
• Some allow bargaining, while others have fixed prices.
• It teaches negotiation, communication, and teamwork.
• Buyers often include other students, teachers, and parents who support and encourage.

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:
Example of 5 products and their labels:

• Milk packet – FSSAI mark
• Pressure cooker – ISI mark
• Packet of rice – AGMARK
• LED bulb – BEE Star rating
• Packet of chips – FSSAI mark

Yes, few products did not have a logo.
For instance, rice, wheat and pulses bought from a local shop.

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:
Here are the important details that should be mentioned on the soap bar label:

1. Brand Name – A catchy and unique name for the soap (e.g., “FreshGlow”).
2. Ingredients List – Mention ingredients used like coconut oil, glycerin, aloe vera, essential oils, etc.
3. Net Weight – The weight of the soap -bar (e.g., 100g).
4. Manufacturing Date (MFD) and Expiry Date – For safety and shelf-life awareness.
5. MRP (Maximum Retail Price) – The final price for the customer.
6. Name and Address of Manufacturer – Required for accountability and customer service.
7. Certifications (if applicable) – Such as ISI mark or FSSAI if relevant (for herbal/organic products).
8. Usage Instructions – How to use the soap or any skin type suitability.
   Some products (like handmade items or loose goods) may not have logos because: They are not packaged or manufactured by large industries. They are locally made, not tested by a standardizing authority. They are unbranded or informal sector products.