Final answer:
A minimum wage is nonbinding if it's below the market's equilibrium wage, not affecting employment. A living wage is binding if set above the equilibrium, causing potential unemployment due to surplus labor.
Step-by-step explanation:
A minimum wage would be a nonbinding price floor if it is set below the equilibrium wage in the market. In this case, the minimum wage does not affect employment levels because companies already pay a wage rate that is higher than the set minimum wage. Conversely, a living wage would be a binding price floor if it is set above the market equilibrium. This causes a surplus of labor because the mandated living wage is higher than what many employers are willing to pay for certain jobs, potentially leading to higher unemployment.