Indifference curves
Indifference curves are a graphical way to show how people value different combinations of two goods or outcomes. Each curve represents all the combinations where a person feels equally satisfied. For example, on a curve representing apples and oranges, a person might be just as happy with 2 apples and 3 oranges as with 3 apples and 2 oranges. The curves indicate preferences: the farther from the origin, the higher the satisfaction. They help economists understand consumer choices and trade-offs when people make decisions about what to buy or consume.
Additional Insights
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Indifference curves represent combinations of two goods that provide equal satisfaction to a consumer. Imagine you enjoy apples and oranges; an indifference curve shows all the different pairs of apples and oranges that you would consider equally appealing. The further away the curve is from the origin, the higher the satisfaction level. These curves help illustrate consumer preferences and the trade-offs people are willing to make between different products to maintain the same level of happiness.