indifferencekäyrä

The indifference curve, often referred to in Finnish as *indifferenskäyrä*, is a fundamental concept in microeconomics used to represent combinations of two goods that yield the same level of utility or satisfaction to a consumer. These curves are graphical tools that help illustrate consumer preferences and trade-offs between different goods.

An indifference curve plots various combinations of two goods, such as apples and oranges, where the consumer is indifferent between them—they provide equal satisfaction. Each point on the curve signifies a bundle of goods that the consumer would be equally willing to accept, assuming no change in their overall utility. The curves are typically downward-sloping, reflecting the law of diminishing marginal utility, which states that as consumption of one good increases, the additional satisfaction gained from consuming more of that good decreases.

Key properties of indifference curves include convexity to the origin, meaning they bend toward the axis, and non-intersection, as each curve represents a different level of utility. Higher indifference curves represent higher levels of satisfaction, allowing consumers to visualize trade-offs between goods while maintaining the same utility level.

Indifference curves are used alongside budget constraints to determine optimal consumption choices. By comparing the budget line with indifference curves, economists can analyze how consumers allocate their income between goods to maximize their utility. This concept is foundational in understanding consumer behavior, demand theory, and market equilibrium in economic analysis.