THE SINGLE MARKET

I. Read and memorize the following words, word-combinations and word-qroups:

market — ринок

e.g. We went to the market to buy food for the family.

tangible — відчутний на дотик; матеріальний

e.g. A good is something tangible that is produced and consumed.

to satisfy desires — задовольнити потреби

e.g. Markets exist to satisfy individual desires.

intangible — невідчутний на дотик; невловимий, неясний

e.g. Some things are intangible but are also important in satisfying individual interests.

goods — товар

e.g. Product markets are divided into two classes: goods and services.

service — послуга

e.g. A service is something intangible that is produced and consumed, also frequently having been purchased in a market.

to adjust — відрегулювати

e.g. When you have someone adjust a carburettor you are purchasing a service.

demander — споживач

e.g. Some people come to a market because they want to buy. They are called demanders.

supplier — постачальник

e.g. Some people come to a market because they want to sell. They are called suppliers.

market allocation — місце на ринку

e.g. The interaction of demanders and suppliers determines a market price and a market allocation of a particular commodity,

to affect the market — впливати на ринок

e.g. This interaction creates a set of incentives for sub­sequent decisions by both suppliers and demanders that may affect many markets.

excess supply — перевищення пропозиції

e.g. Excess supply occurs when, at a particular market price, the quantity that suppliers want to provide to the market exceeds the quantity that demanders want to purchase.

to decline — знижуватися, зменшуватися

e.g. Excess supply will be eliminated if the relative price is free to decline.

equilibrium — рівновага

e.g. The importance of equilibrium is that the equilibrium relative price is the only price at which the interests of demanders coincide with the interests of suppliers,

to eliminate — ліквідувати, знищувати

e.g. Excess demand will be eliminated if the relative price is free to increase.

II. Give English equivalents of the following:

III. Fill in the blanks with appropriate words:

a) a set of incentives; b) excess demand; c) are divided into; d) purchasing a service; e) increases; f) the importance of equilibrium; g) the interaction of demanders and suppliers; h) excess supply; i) decreases .

1. Frequently product markets ... two classes: goods and services.

2. When you have someone adjust a carburetor, however, you are ....

3. ... determines a market price and a particular commodity.

4. This interaction also creates ... for subsequent decisions by both suppliers and demanders that may affect many markets.

5. .... occurs when, at a particular market price, the quantity that suppliers want to provide to the market exceeds the quantity that demanders want to purchase.

6.... occurs when, at a particular market price, the quantity that suppliers want to provide to the market is less than the quantity that demanders want to purchase.

7. When there is excess demand, the relative price ... and when there is excess supply the relative price .... .

8. ... is that the equilibrium relative price is the only price at which the interests of demanders happen to coincide precisely with the interests of the suppliers.

IV. Read and translate the text:

A market is a set of transactions in which a particular kind of commodity is exchanged, and in which the transactions for this commodity among different individuals and firms are related.

There are markets for hundreds of thousands of things. Some of these things are tangible and satisfy individual desires, while others are intangible but also important in satisfying individual interests. These things are frequently referred to as products. Frequently, product markets are divided into two classes: goods and services. For example, a hamburger is a good, while a doctor's examination is a service. When you buy an automobile, you are purchasing a good. When you have someone adjust a carburetor, however, you are pur­chasing a service.

A good is something tangible that is produced, and consumed, often having been purchased in a market. A service is something intangible that is produced and consumed, also frequently having been purchased in a market.

Resources are things used to produce goods, services and capital. Some people come to a market because they want to buy (demanders), others come because they want to sell (suppliers). The interaction of demanders and suppliers determines a market price and a market allocation of a particular commodity. This interaction also creates a set of incentives for subsequent decisions by both suppliers and demanders that may affect many markets. To understand these incentives, as well as how market prices and allocations are determined, we need to understand how suppliers and demanders respond to different relative price and the quantity of a particular commodity that individuals or firms (suppliers) would be willing to provide, to the market.

Demand is all combinations of relative price and the quantity of a particular commodity that individuals or firms (demanders) would be willing to punch are in a market

A market is created when those who willingly supply a good, service, or resource exchange with those who desire to use, control, or consume a good, service, or resource.

Markets reallocate commodities from suppliers to demanders. What if suppliers want to provide more than demanders want to purchase? Or, what if demanders- want more than suppliers, are willing to provide?

Excess supply occurs when, at a particular market price, the quantity that suppliers want to provide to the market exceeds the quantity that demanders want to purchase.

Excess demand occurs when, at a particular market price, the quantity that suppliers want to provide to the market is less than the quantity that demanders want to purchase.

In an open or free market, the relative price for a commodity will generally decrease when there is excess supply; the relative price will generally increase when there is excess demand.

Excess demand will be eliminated if the relative price is free to increase.

Markets adjust in predictable ways if, when there is excess demand, the relative price increases and if, when there is excess supply, the relative price decreases. These changes in relative prices tend to eliminate the excess supply or excess demand. A market is equilibrium when the quantity that suppliers are willing to provide to the market at a specific market price is exactly equal to the quantity that demanders desire to purchase in the market at the same market price.

The importance of equilibrium is that the equilibrium relative price is the only price at which the interests of demanders happen to coincide precisely with the interests of the suppliers. At any other relative price, the interests of suppliers and demanders do not coincide.

V. Answer the following questions:

1. What is a market?

2. What is a good?

3. What is a service?

4. Whom do we call demanders and suppliers?

5. What is supply?

6. What is demand?

7. What is excess supply?

8. What is excess demand?

9. When will excess demand and excess supply be eliminated?

10.What is an equilibrium of a market?

11.Why is market equilibrium important?

VI. Define the terms:

VII. Translate into English:

1. Розрізняють ринки товарів і ринки послуг. 2. Товар — це щось відчутне на дотик, що виробляється та споживається, часто те, що ми можемо придбати на ринку. 3. Послуга — це щось не відчутне на дотик, що виробляється та споживається, що ми також можемо придбати на ринку. 4. Ресурси — ще те, що використовується для виготовлення товару та надання послуг, 5. Взаємодія споживачів і постачальників визначає ринкову ціну та розміщення ринку. 6. Пропозиція — це поєднання відносної ціни та кількості якогось товару, що його фірми або окремі особи бажають постачати на ринок. 7. Споживання — це поєднання відносної ціни та кількості якогось товару, що його фірми або окремі особи бажали б придбати на ринку. 8. Надмірна пропозиція складається тоді, коли кількість товару, яку постачальник хоче поставити на ринок з ринковою ціною, перевищує кількість, яку споживачі бажають і придбати. 9. В умовах вільного ринку відносна ціна на товар буде падати при зростанні пропозиції та підніматися при зростанні попиту.

VIII. Read and dramatize the following dialogue:

A.: I say, Fred, you promised to tell me everything about markets.

B.: Yes, I do remember I promised to tell you.

A.: I am all ears.

B.: To begin with markets are as old as recorded civilization.

A.: If I've got you right, they existed in earlier times.

B.: That's right. In earlier times, they were primarily a physical location where people would gather periodically to exchange goods and services.

A.: So, going to market was an important economic and social activity.

B.: Indeed, it was so important that permanent market locations frequently developed into the towns and cities that now dot (охватывать) much of the landscape.

A.: Sure. And today we think less about markets as specific physical locations where exchanges occur than we do as institutional arrangements (организационные структуры) that tie exchanges together in some way.

B.: I think that any particular transaction occurs in a specific place, of course, but tens of thousands of such transactions scattered across a community or even a nation may con­stitute a market for a particular thing.

A: Yes. And if there is a market, a person can expect that the nature of the transaction will be similar in different locations.

B.: What do you mean by this?

A.: For example, we speak of the housing market in a city or the rental market in a city, even though there is no central location where houses are bought and sold or where apartments are offered for rent and rented. While there may be local peculiarities, buying a home in one part of a city is quite similar to buying a home in another part of a city.

B.: In this sense there is a market for housing in a city, or even across an economy. And, similarly, we may speak of the market for cereal, or soft drinks or shirts or jeans or computer software, even though cereal is sold in thousands of different locations throughout an economy.

A: Thus, a market need not have a single physical location as long as transactions for a specific good or service or resource in one place are related in some way to the transactions for the good or service or resource in some other place.

B: That's great. And in an important sense, however, a market is an idea. That is, a market is a way of thinking about the consequences of the many transactions that occur for specific goods, services, or resources.

IX. Make up your own dialogue using the following expressions:

exchange of goods and services

to satisfy individual interests

to determine a market price

to provide to the market

service or resource

transactions for commodity

to purchase in a market

a market allocation

to consume a good

X. Paraphrase the sentences as in the model:

Model: I am afraid that this firm will provide less quantity of the commodity to the market. I am afraid lest this firm provide less quantity of the commodity to the market.

1. I worry, because the relative price for a commodity will decrease. 2. The retailer is afraid that his goods will satisfy individual desires of only one group of consumers. 3. The producers are afraid that the retailers will provide inconvenient market location. 4. The producers are afraid that their market research is of no value to predict what the people will want. 5. The producers are afraid that marketing operations will be very expensive.

XI. Paraphrase the sentences as in the model:

M о d e I: The manager demanded: «The wholesalers must simplify the process of distribution.» The manager demanded that the wholesalers simplify the process of distribution.

1. The wholesaler demanded: «We must determine a market price of a particular commodity.» 2. The manager ordered: «The interaction of demanders and suppliers must determine a market allocation of a particular commodity.» 3. The manager demanded: «The wholesalers must provide new channels of distribution which help to bring goods to the market.» 4. The middleman suggested: «Suppliers and demanders must respond to different relative prices to determine market allocations and prices.» 5. The producer suggested: «Markets must adjust in predictable ways.» 6. The producer suggests: «Changes in relative price must tend to eliminate the excess supply or excess demand.»

XII. Translate into English using Subjunctive I:

1. Виробники побоювалися, щоб ціни на цей вид товару не знизилися. 2. Необхідно, щоб ринкова ціна визначалася взаємодією суб'єктів попиту та пропозиції. 3. Важливо, щоб встановилася ринкова рівновага. 4. Виробники запропонува­ли, щоб оптові торговці спростили процес збуту. 5. Необ­хідно, щоб виробники були готові постачати на ринок таку кількість товару, яку споживачі готові придбати. 6. Важли­во, щоб інтереси споживачів збігалися з інтересами поста­чальників.

XIII. Communicative situations:

1. Why does a market adjust toward an equilibrium?

If markets did not adjust toward an equilibrium, what behavior would you observe?

2. Do you suppose that a market ever reaches equilibrium? If not, is the concept of equilibrium useful?

3. If a firm found that its market demand was inelastic and cut its production, would its revenues from supplying goods to the market increase or decrease?

THE SINGLE MARKET

Article 2 of the EEC Treaty set the EC the task:

· To promote the harmonious development of economic activities;

· Continuous and balanced expansion;

· Increased stability;

· A rapid rise in living standards and closer relations between its MS.

It was to be accomplished by opening up borders

· to facilitate the free movement of individuals, goods and services and

· by promoting solidarity through common policies and common financial instruments.

The Single market was introduced on 1 January 1993. But it took more than 40 years

1. to abolish internal custom duties and quotas (July 1968),

2. to harmonize custom duties and taxes,

3. to regulate the professions differing from one country to the next,

4. to overcome stubborn protectionist attitudes combined with the proliferation of technical standards

5. to aggravate the partitioning of markets in the early 1980s.

Some MS that were particularly badly hit by the recession, which followed the oil crises of 1973 and 1979, took steps to protect their markets from growing international competition.

1985 – White Paper was published by Jacques Delors to promote the 12 to sign the Single Act in February 1986, containing a time-table and 270 measures needed to create a single market. Physical, fiscal and technical barriers were falling one by one, involving such sensitive areas as the harmonization of VAT rates and right of residence.

On January, 1, 1993 the EC formally became a single market without internal frontiers. It meant that people, goods, services and money move around as freely as within one country. Boarder controls disappeared.

For people:

The Single Market means traveling throughout the EU without restriction, living and working in the EU country of their choice.

For firms:

It means selling goods and offering services without additional formalities. Banks, companies, individuals can invest their money in the currency or market of their choice.

The single market signaled the achievement of the main goals fixed by the EC 35 – 40 years ago. It also marked the starting point for the next stage of the European Integration: political union and economic and monetary union (EMU) and single currency (ECU).

Advantages of the Single Market:

· European companies have access to a huge home market, greater than Japanese and the USA competitors to be more competitive on world markets.

· Greater freedom of mobility for citizens.

· For consumers a wider choice of products and services at competitive prices.

· For workers – high minimum standards of social protection.

Stages to the Single Act:

· Treaty of Rome (1957) – 4 freedoms enshrined (fixed).

· July 1968 – 6 MS removed all tariffs and quotas on their internal trade, creating a single set of tariffs on imports from outside countries.

· 1970s and 1980s – the process slowed because of newcomers (UK, Ireland, and Denmark) and because of economic recessions (1973 and 1979 international oil shocks), a row between EC and UK over payments to the EC budget. The slowdown lasted from 1979 to 1984.

· The Single Market initiative (1985) by Jacques Delors to accelerate the process of achieving 4 freedoms.

· The White Paper became the charter and compass for the EC to reach its goal in 7 ears.

The idea of a frontier-free Europe and a single market existed centuries ago:

1. scholars moved freely between European great universities and seats of learning.

2. Latin was their lingua franca.

3. Craftsmen and soldiers offered their skills and services throughout the continent.

4. Gold and silver coins were the early version of common currency.

5. Passports were introduced only in 19 century. The project of 1992 reestablished a 21- century version of these freedoms.

The goals of the Single Market:

1. To remove physical frontiers;

2. To open up national markets;

3. To create equality of chances among buyers, sellers, companies and individuals;

4. To create decision-taking procedures based on the principles of market economy and democratic control;

5. To develop socially and economically less advanced regions of the EU to enjoy full advantages of the single market;

6. To provide express safeguards to maintain linguistic and cultural diversity (9 official lgs).

SEA is based on the principle of subsidiarity, limiting EU activity to those areas where common action at EU level is more efficient than the policy of individual states.

SEA laid the legislative groundwork to the single market.

The Single Market gives the EU a more solid internal base to carry out trade agreements with many countries and defend its legitimate trading interests (GATT).

White Paper resulted in opening national markets, in road and air transport, banking and insurance, gvt contracts.

SEA (June, 1985) in Milan, the EC meeting, had a series amendments to the Rome Treaty, came into force in 6 month-time.

The key innovation of the SEA – to extend the use of majority voting (instead of unanimity) in EC of Ministers, it also brought the EP to the decision-making process.

Social and environmental policies were also included.

The SOCIAL CHARTER was proclaimed (all but UK).

New social and economic cohesion between rich and poor regions -

Through

· Regional Development Fund,

· Social Fund,

· Agricultural Fund,

· Cohesion Fund (1988 –1993: 7.5 bln ECU – 15 bln ECU).

Research and Development progress and its aims:

· To encourage students mobility and the study of foreign lgs through special programmes (ERASMUS, COMETT, and LINGUA).

· To ensure social security and social protection of workers, adopting rules in the use of equipment, protective gear and clothing.

· To ensure consumer protection and liability for defective products, general product safety;

· To introduce the environmental protection, to give it official status in the SEA.

It includes:

control and elimination of pollution, limiting the toxic content of automobile exhausts, reducing the level of pollution, eliminates the use of chemicals, depleting the earth vital ozone layer.

· To adopt the Schengen Agreement, proclaiming a Frontier-Free Area and providing free movement of all people regardless of nationality;

· To provide law and order security, taking measures to combat terrorism, smuggling and organized crime. It involves cooperation between courts, police forces and gvt departments.

European Single Market [print sheet]

Last updated: 21/07/11

The single market (sometimes called the internal market) describes the EU project to create free trade within the EU and to mould Europe into a single economy. It is one of the most wide-ranging and significant symbols of European integration, encompassing many of the policy areas where the EU is most influential. These include the European Customs Union, the single currency, the Schengen Convention and many other policies and laws designed to unite the diverse national economies of Europe into a single unit. Although it has been developing ever since the European Community was founded in 1957, the single market has only taken off in recent years and continues to develop.

History

The Treaty of Rome (1957) set out four economic freedoms that it wanted to create in Europe: free movement of goods, free movement to provide services, free movement of capital and free movement of people. The first of these was established relatively quickly, with the creation of the European Customs Union in 1968. A further step forward was made in 1979 with a European Court of Justice (ECJ) ruling that created the principle of mutual recognition. Progress on the other areas was much slower. It was not until the Single European Act, SEA (1986) that a deadline of 1992 was set for the full completion of the single market. This involved: the removal of barriers to movement of people; the harmonization of national standards; rules on how governments buy services and goods; the liberalization of financial institution; the setting of more standard Value Added Tax (VAT) rates, and European business laws. In 1992, the Maastricht Treaty began the final leg - Economic and Monetary Union. This came into being in 1999. Since then, the Commission has focused its efforts on liberalising the market for services and improving competitiveness through the Europe 2020 strategy. The Commission is also aware that some areas, such as energy, have not yet been liberalised, and regulations, such as those covering patents, are yet to be harmonised.

Date: 2015-01-02; view: 2171