Final answer:
The government has placed a price floor on labor wages, which is known as the minimum wage. This ensures that workers can earn a basic standard of living, with some areas considering living wages that exceed the federal minimum wage.
Step-by-step explanation:
The government has placed a price floor on labor wages. A price floor is the lowest legal price that can be paid for a good or service, and in the case of labor, it is known as the minimum wage. This economic policy is designed to ensure that workers earn a basic standard of living. For example, the federal minimum wage at the end of 2013 was $7.25 per hour. Individual states can establish their own minimum wage rates as long as they are higher than the federal rate. While price floors are common for labor, they are less so in other markets such as goods and services, stock prices, or interest rates. Particularly in the labor market, living wages are also considered where the earnings are set above the minimum wage to match the cost of living in a specific area.