Final answer:
The statement is false because a price floor causes a surplus where the quantity supplied exceeds the quantity demanded, not the other way around. Example: Minimum wage laws can result in labor surplus (unemployment) if set above the market's equilibrium wage.
Step-by-step explanation:
The statement that 'Price floors create surpluses where quantity demanded exceeds quantity supplied' is false. By definition, a price floor is a legal minimum price set above the equilibrium which prevents the price from falling below a certain level. When a price floor is put into effect, it typically causes the quantity supplied to exceed the quantity demanded, resulting in a surplus of the product because producers are willing to supply more at the higher floor price, but consumers are not willing to buy as much at that price.
An example of a price floor is minimum wage laws, which can create a surplus in labor if set above the equilibrium wage rate, leading to unemployment. Similar principles apply to goods; if a price floor is set for a commodity like milk or wheat, it leads to an excess supply of these products in the market.