QUESTIONS, ACTIVITIES AND PROJECTS (Page 402-406)
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1. If the price of sugar increases from ₹40 per kg to ₹60 per kg, what will most families do to manage their monthly budget?
Answer: C) Reduce the amount of sugar they use
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2. 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?
The main features of a market include the presence of a buyer and a seller, goods and services being bought and sold, and an agreement on a price to complete the transaction. During a recent visit to a local vegetable market, I observed buyers and sellers negotiating prices, various types of vegetables displayed on carts and stalls, and transactions completed through cash and digital payments.
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3. 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.
The epigraph by Adam Smith states, "Prosperity emanates from the market that develops when people need goods and services that they can't create themselves." This is relevant because individuals cannot produce everything they need on their own. Markets connect buyers and producers, enabling the exchange of diverse goods and services, which drives economic growth and societal prosperity.
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4. 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?
In this situation, the farmer is likely to increase the production or cultivation of guavas to meet the higher demand from the seller. Yes, the farmer will start thinking about the market demand for guavas for the next season. His response will be to allocate more resources, care, and land to grow a larger harvest of guavas to increase his own earnings.
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5. 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?
The family chooses to buy from the super bazaar despite the higher price due to factors such as convenience, better packaging, cleanliness, fixed pricing without the hassle of bargaining, and the availability of a wide variety of goods under one roof. Yes, there are factors other than price that affect buying and selling, including quality, packaging, comfort, trust in the seller, shopping environment, and customer service.
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6. 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?
Luxury goods, rare art pieces, designer clothes, and high-end sports cars are examples where prices remain high despite a smaller number of buyers. The reasons include high production costs, scarcity or limited supply, exclusive brand value, premium quality of raw materials, and the unique craftsmanship involved.
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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?
Farmers throw away their produce when there is an overproduction and lack of buyers or storage facilities, causing market prices to drop so low that selling does not even cover the transportation costs. Wholesalers can play a crucial role by buying surplus produce in bulk and utilizing large warehouses or cold storage facilities to preserve them. Possible ways to prevent waste include improving cold storage infrastructure, establishing food processing units to convert excess tomatoes into ketchup or puree, and providing transport support to shift surplus produce to markets where demand is higher.
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8. Sameer wants to expand his small shop to an online market. Suggest two ways he can reach more customers through digital platforms.
1. Sameer can list his products on popular e-commerce aggregators or shopping applications to display his items to a broader geographic audience beyond his local neighborhood.
2. He can create a dedicated business website or use social media platforms to market his products directly, accept digital payments, and offer doorstep delivery. -
9. 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?
Students organize food stalls, game booths, handicraft displays, and exhibition counters during school carnivals. They conduct selling by greeting visitors, displaying items attractively, and setting fixed prices or negotiating politely with schoolmates and teachers to clear their stock and raise funds for school activities.
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10. 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?
Five common products with certification marks are packaged spices (AGMARK), electrical switches (ISI mark), packaged snacks (FSSAI logo), refrigerators (BEE Star rating), and packaged fruit juice (FSSAI logo). Yes, some local or unbranded products sold in open markets do not have a logo because small-scale or unorganized local vendors may not undergo the mandatory testing and official certification procedures required by government agencies.
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11. 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?
A proper product label should mention the brand name, product description, net weight, maximum retail price (MRP), list of ingredients used, date of manufacture, batch number, manufacturer's address, and customer care details so that consumers can understand the product better and verify its quality.
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12. Match the following types of markets with their characteristics:
A Ans B 1. Physical market ( d ) a. Goods and services flow outside the nation's boundaries 2. Online market ( e ) b. Deals in bulk quantities 3. Domestic market ( f ) c. Serves the final consumers with goods and services 4. International market ( a ) d. Requires physical presence of buyers and sellers 5. Wholesale market ( b ) e. Buyers and sellers meet virtually and can transact at any time 6. Retail market ( c ) f. Lies within the boundaries of a nation.
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