Exercise Question Answers Chapter 12-Understanding Markets(Theme E-Economic Life Around Us) Subject Social Science Class 7 ************************ 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: A market is a place where buyers and sellers meet to exchange goods or services. One key feature is price negotiation , especially in informal or local markets. Markets have variety of goods , ranging from food to clothes and electronics. They often involve interpersonal interactions and bargaining. Payment methods can vary: cash, UPI, or card. In my recent visit to a vegetable market, I saw vendors calling out prices, people comparing items, and many buyers using mobile UPI for quick payments. 2. Remember the epigraph from a famous economist at the beginning of the chapter? Discuss its relev...
Exercise Question Answers Chapter From Barter to Money(Economics) Subject Social Science Class 7
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1. How does the barter system take place and what kinds of commodities were used for exchange under the system?
Answer:
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The barter system is the exchange of goods or services without using money.
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It requires a "double coincidence of wants" — both parties must want what the other offers.
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Commonly used items included cowrie shells, salt, tea, tobacco, cloth, and cattle.
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People in different regions used locally available commodities.
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Goods like handmade items and food produce were exchanged directly.
2. What were the limitations of the barter system?
Answer:
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Difficulty in finding a double coincidence of wants.
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Lack of a common standard of value for different goods.
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Problems with portability — large or heavy goods were hard to carry.
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Issues with divisibility — goods couldn’t always be divided fairly.
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Lack of durability — perishable goods could not be stored long.
3. What were the salient features of ancient Indian coins?
Answer:
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Made of metals like gold, silver, copper or alloys.
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Carried symbols called rūpas punched on the coin surfaces.
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Had images of deities, rulers, animals, and nature motifs.
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Used for trade within and across kingdoms.
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Known as kārṣhāpaṇas or paṇas in ancient times.
4. How has money as a medium of exchange transformed over time?
Answer:
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Started with barter, then to cowries and metallic coins.
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Paper currency was introduced for easy storage and portability.
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Later, plastic money (debit/credit cards) became common.
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Today, digital money via UPI and QR codes is widely used.
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Each form solved earlier limitations and made exchange easier.
5. What steps might have been taken in ancient times so that Indian coins could become the medium of exchange across countries?
Answer:
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Use of durable and high-quality metal for minting coins.
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Engraving widely recognized symbols or rulers on coins.
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Trade relations with other kingdoms to spread their use.
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Establishment of powerful kingdoms with influence beyond borders.
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Uniformity in weight and size to build trust in value.
6. Read the following lines from the Arthaśhāstra. “An annual salary of 60 paṇas could be substituted by an āḍhaka of grain per day, enough for four meals…” (One āḍhaka is equal to about 3 kg) What does this indicate about the value of one paṇa? The fine for failing to help a neighbour was 100 paṇas. Compare this with the annual salary. What conclusion can you draw about the human values being encouraged through this?
Answer:
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Shows that one āḍhaka of grain (approx. 3 kg) = 1 paṇa/day, suggesting its basic food value.
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Annual salary was 60 paṇas, so a fine of 100 paṇas was a huge amount.
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It reflects the seriousness of moral duties (like helping neighbours).
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Promoted ethical living and responsibility within the community.
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Emphasized social justice and protection as high human values.
7. Write and enact a skit to show how people may have persuaded each other to use cowrie shells (or other such items) as the medium of exchange.
Answer: (Characters: Merchant, Farmer, Fisherman, Elder)
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Merchant: “We waste too much time finding the right items to trade!”
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Farmer: “True! I had to walk all day with sacks of grain.”
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Fisherman: “Look at these shiny cowrie shells — everyone likes them.”
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Elder: “Let’s all agree to use cowries. Easy to carry and count!”
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All agree and begin trading with cowries, celebrating a new exchange system.
8. The RBI is the only legal source that prints and distributes paper currency in India. To prevent illegal printing of notes and their misuse, the RBI has introduced many security features. Find out what some of these measures are and discuss them in class.
Answer:
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Watermarks of Mahatma Gandhi’s face and numbers.
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Security threads that glow under UV light.
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Micro-lettering and latent images.
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Intaglio (raised) printing for the visually impaired.
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Colour-changing ink and see-through register.
9. Interview a few of your family members and local shopkeepers, and ask them their preferences in making and receiving payments — do they prefer cash or UPI? Why?
Answer:
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Family elders often prefer cash for ease and habit.
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Younger members prefer UPI for speed and no need to carry cash.
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Shopkeepers: Prefer UPI for small transactions but cash for bigger ones.
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Reasons for UPI: Fast, secure, traceable, no change needed.
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Reasons for cash: No network needed, no transaction fee, traditional trust.
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