Under what circumstances would a minimum wage be a nonbinding price floor? Under what circumstances would a living wage be a binding price floor?

A minimum wage is the lowest wage that an employer can legally pay its employees, while a living wage is the minimum income standard necessary to maintain an acceptable quality of life. A price floor is a government-imposed minimum price for a good or service, like a minimum wage. A nonbinding price floor is when the price floor is set below the equilibrium price, so it doesn't affect the market. A binding price floor is when the price floor is set above the equilibrium price, which creates a surplus of supply and has an impact on the market.

For a minimum wage to be a nonbinding price floor, it would have to be set below the equilibrium wage. In this case, the minimum wage wouldn't have any effect on the market because the actual wages paid by employers would be higher than the minimum wage. This can occur in a competitive market where the demand for labor is high or when the required skill level for jobs is above the minimum wage level.

For a living wage to be a binding price floor, it would have to be set above the equilibrium wage. This means that employers would have to pay workers a wage higher than what the market dictates. A binding living wage typically occurs when there is concern about workers not being able to maintain an acceptable quality of life with their current wages, prompting the government to impose higher wages to ensure that workers can afford basic necessities. In summary, a minimum wage would be a nonbinding price floor if it's set below the equilibrium wage, having no impact on the market. A living wage would be a binding price floor if it's set above the equilibrium wage, creating a surplus of supply and affecting the market.