CHAPTER 12: UNDERSTANDING MARKETS
1. A place where people buy and sell goods is called a:
A. Factory
B. Market
C. Farm
D. School
Answer: B. Market
2. Markets are also known as:
A. Mall and metro
B. Bazaar, haat and marukatté
C. Park and playground
D. Hospital and library
Answer: B. Bazaar, haat and marukatté
3. In economics, a need is something that a person:
A. Desires but does not need
B. Requires to survive
C. Buys only online
D. Does for entertainment
Answer: B. Requires to survive
4. Which of the following is a need?
A. Food
B. Mobile phone
C. Car
D. Video game
Answer: A. Food
5. In economics, a want is something that a person:
A. Requires to survive
B. Desires but it is not essential for survival
C. Produces at home
D. Shares with others for free
Answer: B. Desires but it is not essential for survival
6. Which of the following is a want?
A. Water
B. Clothing
C. Ice cream
D. Shelter
Answer: C. Ice cream
7. Markets help individuals, households and businesses to:
A. Produce goods only
B. Grow crops only
C. Obtain goods and services
D. Pay taxes only
Answer: C. Obtain goods and services
8. Goods and services become available to us through:
A. Schools
B. Markets
C. Libraries
D. Hospitals
Answer: B. Markets
9. Markets have existed for a long time because people rely on them to:
A. Build houses
B. Fulfil their needs and wants
C. Watch films
D. Play sports
Answer: B. Fulfil their needs and wants
10. In addition to providing goods and services, markets also:
A. Build roads
B. Connect people, traditions and ideas
C. Manufacture machines
D. Run schools
Answer: B. Connect people, traditions and ideas
11. The market shown in the picture on page 247 mainly shows a:
A. Online market
B. Weekly village haat
C. Busy urban market
D. Factory outlet
Answer: C. Busy urban market
12. In the picture of the market (Fig. 12.2), people are buying:
A. Only vegetables
B. A variety of goods and services
C. Only mobile phones
D. Only clothes
Answer: B. A variety of goods and services
13. The cinema, mobile shop and mall in Fig. 12.2 are examples of:
A. Primary activities
B. Secondary activities
C. Tertiary activities
D. Household activities
Answer: C. Tertiary activities
14. Which activity shown in the picture is an example of a service?
A. Buying vegetables
B. Watching a film at a cinema
C. Purchasing a refrigerator
D. Buying a mobile phone
Answer: B. Watching a film at a cinema
15. A person buying fruits in the market is a:
A. Producer
B. Consumer
C. Trader
D. Transporter
Answer: B. Consumer
16. A person selling vegetables in the market is a:
A. Consumer
B. Producer
C. Student
D. Doctor
Answer: B. Producer
17. Hampi Bazaar was located in which state?
A. Tamil Nadu
B. Karnataka
C. Kerala
D. Maharashtra
Answer: B. Karnataka
18. The Hampi Bazaar was one of the prosperous markets of:
A. 10th-century India
B. 12th-century India
C. 16th-century India
D. 18th-century India
Answer: C. 16th-century India
19. Markets can be set up at:
A. Physical places or online
B. Only physical places
C. Only online
D. Only in malls
Answer: A. Physical places or online
20. Which of the following is NOT a type of market shown or mentioned in the chapter?
A. Street market
B. Mall
C. Online market
D. Airport
Answer: D. Airport
21. In a market, buyers and sellers:
A. Compete with each other
B. Never interact
C. Do not need each other
D. Only exchange services
Answer: A. Compete with each other
22. Which of the following is an example of a retail market?
A. A small shop selling mobile phones
B. A wholesale warehouse
C. A factory
D. A farm
Answer: A. A small shop selling mobile phones
23. Which market is usually held periodically in a particular area?
A. Weekly market (haat)
B. Mall market
C. Online market
D. Export market
Answer: A. Weekly market (haat)
24. Which of the following is an example of an online market?
A. Haat
B. Street bazaar
C. E-commerce website
D. Village market
Answer: C. E-commerce website
25. What is one advantage of an online market?
A. It always requires travel to a shop.
B. It allows people to buy goods without visiting a physical shop.
C. It does not offer any goods.
D. It can be used only by producers.
Answer: B. It allows people to buy goods without visiting a physical shop.
26. Which of the following is a primary activity?
A. Teaching
B. Farming
C. Banking
D. Transport
Answer: B. Farming
27. Which of the following is a secondary activity?
A. Manufacturing in a factory
B. Selling in a shop
C. Providing transport
D. Medical services
Answer: A. Manufacturing in a factory
28. Which of the following is a tertiary activity?
A. Mining
B. Construction
C. Banking
D. Fishing
Answer: C. Banking
29. Which of the following best explains why markets develop?
A. People need goods and services that they cannot create themselves.
B. People like to visit new places.
C. People enjoy watching advertisements.
D. People want to avoid production of goods.
Answer: A. People need goods and services that they cannot create themselves.
30. Markets help goods and services reach people from different places through:
A. Roads and transport
B. Schools
C. Hospitals
D. Cinema halls
Answer: A. Roads and transport
31. Which term refers to the total amount of goods and services that people are willing and able to buy at a given price?
A. Supply
B. Demand
C. Production
D. Consumption
Answer: B. Demand
32. Which term refers to the total amount of goods and services that producers are willing and able to sell at a given price?
A. Demand
B. Supply
C. Trade
D. Consumption
Answer: B. Supply
33. When demand for a product increases, its price usually:
A. Falls
B. Rises
C. Remains the same in every situation
D. Becomes zero
Answer: B. Rises
34. When the supply of a product increases, its price usually:
A. Rises
B. Falls
C. Remains the same in every situation
D. Doubles
Answer: B. Falls
35. Price is the:
A. Quantity of a good
B. Value of money
C. Amount of money paid for a good or service
D. Name of a market
Answer: C. Amount of money paid for a good or service
36. Which of the following is a non-price factor that can affect demand for a product?
A. Income of people
B. Supply of the product
C. Transport cost
D. Number of shops
Answer: A. Income of people
37. Which of the following can increase the demand for ice cream?
A. Hot weather
B. Cold weather
C. Heavy rainfall in every situation
D. Winter season
Answer: A. Hot weather
38. Which of the following can reduce the demand for woollen clothes?
A. Cold weather
B. Hot weather
C. Low income in every situation
D. Festivals
Answer: B. Hot weather
39. Which of the following can increase the supply of a product?
A. Higher production
B. Lower production
C. Decrease in the number of producers
D. Higher demand
Answer: A. Higher production
40. Which of the following is likely to increase the supply of a good?
A. Better technology
B. Higher taxes in every situation
C. Natural disaster
D. Shortage of raw materials
Answer: A. Better technology
41. Markets create employment opportunities for many people. This is an important role of markets because they:
A. Increase income and improve people’s lives
B. Reduce the number of goods
C. Stop production of goods
D. Eliminate the need for services
Answer: A. Increase income and improve people’s lives
42. Markets promote competition among sellers, which usually leads to:
A. Higher prices and lower quality
B. Lower prices and better quality
C. No change in prices in every situation
D. Only imported goods
Answer: B. Lower prices and better quality
43. Which of the following is a common facility provided by the government in markets?
A. Roads and transport
B. Cinema halls
C. Shopping malls in every market
D. Private shops
Answer: A. Roads and transport
44. The government also plays a role in markets by:
A. Making and enforcing rules
B. Only collecting taxes
C. Stopping all trade
D. Running all shops
Answer: A. Making and enforcing rules
45. Which of the following is an example of a consumer right?
A. Right to education
B. Right to information about products
C. Right to open a factory
D. Right to collect taxes
Answer: B. Right to information about products
46. Consumers should check the quality of goods and services before purchasing to:
A. Pay higher prices
B. Avoid being cheated
C. Increase demand
D. Reduce supply
Answer: B. Avoid being cheated
47. Which organisation in India works to protect the rights of consumers?
A. RBI
B. SEBI
C. Consumer Affairs Department
D. NITI Aayog
Answer: C. Consumer Affairs Department
48. A consumer can seek redressal if they face a problem with a product or service. This means they can:
A. File a complaint
B. Increase the price
C. Stop the market
D. Open a new shop
Answer: A. File a complaint
49. Which of the following is responsible behaviour by a consumer?
A. Buying goods without checking quality
B. Asking for a bill or receipt
C. Ignoring product information
D. Always choosing the most expensive product
Answer: B. Asking for a bill or receipt
50. Overall, markets play an important role in people’s lives because they:
A. Only provide entertainment
B. Help fulfil needs and wants, create employment and connect people
C. Replace all government functions
D. Exist only in cities
Answer: B. Help fulfil needs and wants, create employment and connect people
