Which of the following observations can be be concluded for APC i.e. average propensity to consume?

1. Average propensity can be zero when the consumption is equal to the income.
2. APC falls with increase in income as the proportion of consumption also decreases.
3. APC is less than 1 to the left of the break-even point and greater than 1 to the right of the break-even point.
4. Average propensity to consume is the ratio of total consumption expenditure to total income.

2 and 4

Average propensity to consume is the ratio of total consumption expenditure to total income. APC falls with increase in income as the proportion of consumption also decreases because with increase in income people tend to save more. APC can never be 0, as consumption can never be 0, due to autonomous consumption in the economy. As, APC always falls with increase in income, APC is more than 1 to the left of the break-even point and less than 1 to the right of the break-even point.