Indifferenssikyyriä

Indifferenssikyyriä is a Finnish term that translates to "indifference curve" in English. In economics, an indifference curve is a graphical representation of the preferences of a consumer. It shows all the combinations of two goods that a consumer considers equally satisfying. This means that a consumer is indifferent between any two points located on the same indifference curve, as they yield the same level of utility or satisfaction.

Indifference curves are typically downward-sloping and convex to the origin. The downward slope indicates that to increase the consumption of one good, the consumer must decrease the consumption of the other good while maintaining the same level of satisfaction. The convexity implies that as a consumer has more of one good, they are willing to give up less of the other good to obtain an additional unit of the first. This is due to the principle of diminishing marginal rate of substitution.

A map of indifference curves, known as an indifference map, shows a consumer's entire set of preferences for two goods. Curves further away from the origin represent higher levels of satisfaction. Indifference curves for the same consumer do not intersect. The concept of indifference curves is a fundamental tool in microeconomic analysis, particularly in understanding consumer choice, demand, and welfare.