The Price Puzzle What Drives the Market Class 9 Extra Questions and Answers SST Chapter 9

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The Price Puzzle What Drives the Market Class 9 Extra Question Answer

Class 9 SST Chapter 9 The Price Puzzle What Drives the Market Extra Questions

The Price Puzzle What Drives the Market Class 9 Very Short Question Answer

Question 1.
What is demand?
Answer:
Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price.

Question 2.
State the Law of Demand.
Answer:
The Law of Demand states that, other things remaining constant, the quantity demanded decreases when the price increases and increases when the price decreases.

Question 3.
What is supply?
Answer:
Supply is the quantity of a product that sellers are willing and able to offer for sale at a particular price.

Question 4.
Define market equilibrium.
Answer:
Market equilibrium is the point where quantity demanded equals quantity supplied.

Question 5.
What are substitute goods? Give one example.
Answer:
Substitute goods are goods that can replace each other.
For example, tea and coffee.

Question 6.
What are complementary goods? Give one example.
Answer:
Complementary goods are goods that are used together.
For example, mobile phones and earphones or tea and sugar.

Question 7.
What is a price ceiling?
Answer:
A price ceiling is the maximum price fixed by the government that sellers can charge for a product or service.

Question 8.
What is hoarding?
Answer:
Hoarding is the accumulation of goods beyond immediate needs in anticipation of future shortages or higher prices.

Question 9.
Name any four regulatory bodies of the Government of India.
Answer:
SEBI, RBI, TRAI, and CCPA

Question 10.
What is purchasing power?
Answer:
Purchasing power is the ability of a consumer to buy goods and services with available income.

Question 11.
Define market demand.
Answer:
Market demand is the total quantity of a product demanded by all consumers in the market at different prices.

Question 12.
What is a price floor?
Answer:
A price floor is the minimum price fixed by the government below which a good or service cannot be sold.

Question 13.
Name any one determinant of supply other than price.
Answer:
Technology.

Question 14.
What is black marketing?
Answer:
Black marketing is the illegal sale of goods at higher prices, especially during shortages.

Question 15.
What is the Essential Commodities Act, 1955?
Answer:
The Essential Commodities Act, 1955, is a law that allows the government to regulate the supply and prices of essential commodities to ensure their availability and prevent hoarding and black marketing.

Question 16.
What do you mean by revenue?
Answer:
Revenue is the total money a business earns from selling goods or services before any expenses are deducted.

The Price Puzzle What Drives the Market Class 9 Short Question Answer

Question 1.
Explain the factors affecting demand other than price.
Answer
Demand is influenced by several factors other than price, such as the income of consumers, prices of related goods, tastes and preferences, seasonality, future price expectations, and the size and composition of the population. These factors may increase or decrease demand even when the price remains unchanged.

Question 2.
Explain the factors affecting supply.
Answer:
Supply depends on factors such as the prices of related goods, number of sellers, level of technology, future expectations of producers, cost of production, and availability of resources. These factors influence the quantity that producers are willing to supply.

Question 3.
Distinguish between excess demand and excess supply.
Answer:

Excess Demand	Excess Supply
Quantity demanded exceeds quantity supplied.	Quantity supplied exceeds quantity demanded.
Creates a shortage.	Creates a surplus.
Prices tend to rise.	Prices tend to fall.

Question 4.
Explain how market equilibrium is achieved.
Answer:
Market equilibrium is achieved when quantity demanded equals quantity supplied. If there is excess demand, prices rise, reducing demand and increasing supply. If there is excess supply, prices fall, increasing demand and reducing supply until equilibrium is restored.

Question 5.
Why does the government intervene in markets?
Answer::
The government intervenes to regulate unfair practices, protect consumers and producers, prevent monopolies, provide public goods, control prices of essential commodities, and promote social welfare.

Question 6.
Explain any three limitations of government intervention.
Answer:
Excessive government intervention may reduce producers’ incentives due to price controls, increase compliance costs for businesses, and discourage innovation and entrepreneurship.

Question 7.
What are essential commodities, and how does the government regulate them?
Answer:
Essential commodities are goods necessary for daily life. The government regulates them through the Essential Commodities Act, 1955, to ensure adequate supply, prevent hoarding, and control prices.

Question 8.
Explain the difference between individual demand and market demand.
Answer:
Individual demand is the quantity of a product that a single consumer is willing and able to buy at different prices. Market demand is the total quantity demanded by all consumers in the market at different prices.

Question 9.
How do substitute goods and complementary goods affect demand?
Answer:
If the price of a substitute good increases, the demand for the other related good increases because consumers switch to the cheaper alternative. Complementary goods are used together, so if the demand for one good increases, the demand for the other also increases. If the demand for one falls, the demand for the other also falls.

Question 10.
Why are real-world markets considered dynamic?
Answer:
Real-world markets are dynamic because demand and supply keep changing due to factors such as technological changes, changes in wages and interest rates, wars and political events, pandemics, weather, and natural disasters. As these factors change, prices and market equilibrium also change.

Question 11.
Why do people avoid paying for public goods and wait for others to pay?
Answer:
People may avoid paying for public goods because everyone can use them whether or not they contribute. They expect others to bear the cost while they enjoy the benefits without paying.

The Price Puzzle What Drives the Market Class 9 Long Question Answer

Question 1.
Explain the concept of demand. State the Law of Demand and discuss the factors affecting demand other than price.
Answer:
Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price. It must be supported by purchasing power. According to the Law of Demand, other things remaining constant, the quantity demanded increases when the price falls and decreases when the price rises. Thus, price and quantity demanded have an inverse relationship. Besides price, demand is affected by the income of consumers, prices of related goods (substitute and complementary goods), tastes and preferences, seasonality, future price expectations, and the size and composition of the population. These factors influence demand even when the price remains unchanged.

Question 2.
Explain how market equilibrium is determined. What happens when there is excess demand or excess supply?
Answer:
Market equilibrium is the point where quantity demanded equals quantity supplied. At this point, there is neither a shortage nor a surplus, and the market price tends to remain stable.
If the price is below the equilibrium price, quantity demanded exceeds quantity supplied, resulting in excess demand (shortage). This creates pressure for prices to rise.
If the price is above the equilibrium price, quantity supplied exceeds quantity demanded, resulting in excess supply (surplus). Sellers lower prices to increase sales.
Thus, the interaction of demand and supply helps the market move towards equilibrium.

Question 3.
Explain the role of the government in the economy. Also mention the limitations of excessive government intervention.
Answer:
The government regulates markets to protect consumers and producers, prevent unfair practices and monopolies, control prices of essential goods when necessary, and provide public goods such as roads, parks, and street lighting. However, excessive government intervention may reduce producers’ incentives, increase compliance costs, and discourage innovation and entrepreneurship. Therefore, government intervention should be balanced and aimed at promoting public welfare.

Question 4.
Explain how demand and supply influence prices in real-life markets with suitable examples.
Answer:
Prices are determined by the interaction of demand and supply. When demand increases, or supply decreases, prices tend to rise. When supply increases or demand decreases, prices tend to fall. Real-life markets are dynamic because demand and supply change due to factors such as seasons, technology, consumer preferences, festivals, and government policies. For example, apple prices are high at the beginning of the season due to low supply but fall as supply increases. Similarly, hotel room tariffs rise during peak tourist seasons because of high demand.

Question 5.
Explain the factors affecting demand other than price.
Answer:
Demand is influenced by several factors besides price. These include consumers’ income, prices of substitute and complementary goods, tastes and preferences, seasonality, future price expectations, and the size and composition of the population. These factors affect consumers’ willingness and ability to buy goods even when the price remains unchanged.

Question 6.
Explain the role of the government in the economy. Mention any three ways in which it intervenes in the market.
Answer:
The government intervenes to ensure fairness, equity and the welfare of vulnerable sections of society. It regulates monopolies and unfair trade practices, fixes price ceilings and price floors when necessary, and provides public goods such as roads, bridges, public parks and street lighting. Such intervention helps ensure the efficient and equitable functioning of markets.

The Price Puzzle What Drives the Market Class 9 Competency Based Questions

Question 1.
During heavy rains, the supply of vegetables in a city decreases sharply. However, the demand remains the same.
(a) What is likely to happen to the price of vegetables?
(b) Identify the market situation.
Answer:
(a) The price of vegetables is likely to increase because supply has decreased while demand remains unchanged.
(b) The market faces excess demand as quantity demanded exceeds quantity supplied, leading to a shortage of vegetables.

Question 2.
A new technology enables farmers to produce more wheat at a lower cost. Many farmers adopt this technology.
(a) Which factor of supply has changed?
(b) How will it affect market supply?
Answer:
(a) The factor that has changed is technology.
(b) Market supply will increase because improved technology reduces production costs and increases output.

The Price Puzzle What Drives the Market Class 9 Skill Based Questions

Question 1.
Riya has ₹ 600 to spend. She wants to buy a school bag costing ₹ 550 today. Her friend tells her that a festival sale starting next week may offer a 20% discount on school bags. What should Riya do? Give a reason based on the concept of future price expectations.
Answer:
Riya should wait for the festival sale if she expects the price to fall. According to the concept of future price expectations, consumers often postpone purchases when they expect lower prices. This will help her save money.

Question 2.
A fruit seller recorded the following sales of oranges.

Price (₹/kg)	Quantity Sold (kg)
120	10
100	15
80	22
60	30

Analyse the data and answer:
(a) What relationship do you observe between price and quantity demanded?
(b) Which economic law does this illustrate?
Answer:
(a) As the price decreases, the quantity demanded increases.
(b) It illustrates the Law of Demand.

The Price Puzzle What Drives the Market Class 9 Case/Source Based Questions

Question 1.
Read the passage given below and answer the questions that follow:
During the summer season, the demand for mangoes increases. Initially, the supply is limited, and prices remain high. As more mangoes arrive in the market, supply increases and prices begin to fall. Consumers buy larger quantities, while sellers continue supplying according to market conditions.
(a) Which law explains the behaviour of consumers in this case?
(b) Why were mango prices high at the beginning of the season?
(c) What happened to the quantity demanded when prices fell?
(d) Which market force increased as the season progressed?
(e) Name the point where quantity demanded equals quantity supplied.
Answer:
(a) The Law of Demand.
(b) Because supply was limited.
(c) The quantity demanded increased.
(d) Supply.
(e) Market equilibrium.

The Price Puzzle What Drives the Market Class 9 Picture Based Questions

Question 1.
Observe the picture and answer the following questions.

(a) Identify the point where demand equals supply.
(b) What is this point E called?
(c) What happens when the price is above the equilibrium price?
(d) What happens when the price is below the equilibrium price?
(e) Which curve slopes downward and why?
Answers
(a) Point E.
(b) Market Equilibrium.
(c) Quantity supplied exceeds quantity demanded, resulting in excess supply (surplus).
(d) Quantity demanded exceeds quantity supplied, resulting in excess demand (shortage).
(e) The Demand Curve slopes downward because quantity demanded increases as price decreases, illustrating the Law of Demand.

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