When is the value of average propensity to save negative?

The correct answer is Option (2) → When consumption is more than the income

APS = S / Y, and S = Y − C. When consumption is more than income, saving is negative, so the APS is negative too.

Option (1) When savings are equal to income  — Incorrect. If saving equals income, consumption is zero and APS = 1.

Option (2) When consumption is more than the income — Correct. C > Y gives S < 0, so S / Y is below zero.

Option (3) When income is more than the consumption — Incorrect. If Y is more than C, saving is positive, so APS is positive.

Option (4) When consumption is equal to income — Incorrect. If C = Y, saving is zero, so APS = 0.