Understanding Markets — Hard

Q1. Consider the following two statements about 'demand' and 'supply' Statement A: Demand is the quantity of a product that consumers are willing and able to purchase at a particular price at a given time. Statement B: Supply is the quantity that the government allows sellers to release in the market at any one time. Which is correct?

• A. Only Statement A is correct
• B. Only Statement B is correct
• C. Both A and B are correct
• D. Neither A nor B is correct

Q2. In the guava-cart story (Figs. 12.5–12.7), the seller finally settles on ₹40/kg. Why does the chapter call this the 'just-right' price?

• A. It is the price the government has officially declared as fair
• B. It is the lowest possible price for the buyer regardless of the seller's costs
• C. It is high enough for the seller to be profitable and low enough for buyers to keep buying
• D. It is the average of the morning and evening market prices

Q3. Consider the following three statements about domestic and international markets: I. A domestic market operates within the geographical boundaries of one country. II. International markets exist outside a nation's boundary, with sellers exporting and buyers importing. III. Paper for printing a textbook procured from paper mills across India is a domestic-market transaction. Which are correct?

• A. I and II only
• B. II and III only
• C. I and III only
• D. I, II and III

Q4. Match India's trade partners with the goods/services as shown in Fig. 12.10 : A. North America 1. Diamonds (imported) B. Europe (exports) 2. Crude petroleum (imported) C. Africa (imports) 3. Engineering goods like food-processing machinery D. West Asia 4. Outsourced services like software (exported) Choose the correct match

• A. A-4, B-3, C-1, D-2
• B. A-2, B-1, C-4, D-3
• C. A-3, B-4, C-2, D-1
• D. A-1, B-2, C-3, D-4

Q5. 'distributors'. Which of the following BEST captures the role distributors play that wholesalers alone cannot?

• A. Distributors manufacture the product in their own factories
• B. Distributors directly sell to the final consumer at MRP
• C. Distributors bridge the gap when it is difficult for wholesalers to reach a large number of retailers because of distances and terrains
• D. Distributors are appointed by the government to fix prices

Q6. The 'Don't Miss Out' box mentions another industry besides textiles for which Surat is famous. Which of the following is correct?

• A. Surat hosts the largest diamond industry in the world with approximately 1.5 million (15 lakh) artisans involved in cutting and polishing
• B. Surat is India's largest steel-producing city
• C. Surat is the home of India's first oil refinery, set up in the 14th century
• D. Surat has the largest jute-processing industry in Asia

Q7. Ravi's class is preparing a chart of famous wholesale markets in India. Based on Figs. 12.15 and 12.17, which pairing is CORRECT?

• A. Khari Baoli, Old Delhi — gems and jewellery; Johari Bazaar, Jaipur — spices and dry fruits
• B. Khari Baoli, Old Delhi — spices and dry fruits; Johari Bazaar, Jaipur — gems and jewellery
• C. Khari Baoli, Old Delhi — flowers; Johari Bazaar, Jaipur — textiles
• D. Khari Baoli, Old Delhi — cotton; Johari Bazaar, Jaipur — vegetables

Q8. Traces the Surat textile chain. Where does the RAW COTTON for Surat's cotton-textile mills come from?

• A. Only from cotton fields within Surat city limits
• B. Only imported from South-East Asia
• C. Through cotton mandis from nearby states like Maharashtra, and from other parts of Gujarat
• D. From the BEE Star-rated farms across India

Q9. Match the certification marks with the product categories they certify: A. FSSAI 1. Electrical appliances, construction materials, tyres, paper B. ISI 2. Agricultural products like vegetables, fruits, pulses, spices, honey C. AGMARK 3. Energy efficiency of electronics like TVs, ACs, refrigerators D. BEE Star 4. Packaged food being safe to consume Choose the correct option

• A. A-1, B-2, C-3, D-4
• B. A-4, B-1, C-2, D-3
• C. A-2, B-4, C-1, D-3
• D. A-3, B-1, C-4, D-2

Q10. The 'Think About It' box mentions that consumer protection is not a modern phenomenon. According to that box, Kautilya's Arthashastra instructed traders dealing in clarified butter (ghee) to give buyers an additional 1/50 part as

• A. Mānasrāva, to compensate for the reduction in quantity owing to the ghee sticking to the measuring can
• B. Avagraha, a goodwill gift for festivals
• C. Anubandha, a deposit refunded after the next sale
• D. Pratidaan, a duty paid to the king

Q11. Assertion (A): The government provides public goods like parks, roads and policing. Reason (R): These are goods and services that producers do not expect to make a profit on, even though they are needed by society. Choose the correct option

• A. Both A and R are true, and R is the correct explanation of A
• B. Both A and R are true, but R is NOT the correct explanation of A
• C. A is true, R is false
• D. A is false, R is true

Q12. How the government 'mitigates the external effects of markets'. The example given of single-use plastics fits this idea because

• A. Single-use plastics raise the price of food
• B. Producing them pollutes the environment and poses health risks to consumers — effects beyond the simple buying-selling transaction
• C. They are imported from outside India
• D. They cannot be sold without an AGMARK certificate

Q13. Aarti's mother is teaching her how to read a packet of gram flour before buying it (Fig. 12.29). According to, which set of details on the label helps a consumer assess product quality?

• A. Only the MRP and the brand colour
• B. Only the nutrition panel and the company's social media handle
• C. Net quantity, date of manufacture, best-before date, batch number, MRP, FSSAI mark with licence number, ingredients and allergen declaration
• D. Only the price per gram, calculated by the buyer

Q14. 'Consumers prefer to buy refrigerators that use less electricity.' Following the chain in Fig. 12.11, what happens when a LARGE NUMBER of consumers begin asking for energy-efficient refrigerators?

• A. Wholesalers stop buying refrigerators altogether
• B. The government bans older refrigerators the same day
• C. Producers receive the signal and begin producing refrigerators that use less electricity, benefiting society through energy-efficient production
• D. Retailers raise prices on all refrigerators by 50%

Q15. The 'Don't Miss Out' box describes a south-Indian tradition involving haldi and kumkum. Which of the following BEST captures what the box teaches about markets?

• A. Sellers of haldi and kumkum in south India give a small quantity separately, free of charge, as a mark of auspiciousness and good wishes — showing that market interactions can carry non-economic, cultural meaning beyond price
• B. Haldi and kumkum can only be sold through online aggregators in south India
• C. The government has fixed a maximum price for haldi and kumkum across India
• D. Haldi and kumkum are India's largest exports to West Asia