In the diagram above, ST is the budget line while l,ll and lll represent indifference curves. A rational consumer will choose to consume at point

In the diagram above, ST is the budget line while l,ll and lll represent indifference curves. A rational consumer will choose to consume at point

Answer Details

The consumer will choose to consume at the point where the indifference curve is tangent to the budget line. At this point, the consumer will achieve the highest possible level of utility given their income and the prices of the goods. In the diagram, the point of tangency between indifference curve II and the budget line ST is point L. Therefore, a rational consumer will choose to consume at point L.