What is indifference curve?

An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curve indicates that a consumer is indifferent between the two and all points give him the same utility.

Graphically, the indifference curve is drawn as a downward sloping convex to the origin. The graph shows a combination of two goods, X and Y, that the consumer consumes.

In the above diagram, there are three indifference curves (I1, I2 and I3) for two goods X and Y with for different levels of income. In indifference curve I2, there are numerous possible bundles of goods X and Y those shall gave the equal satisfaction to the consumer. For example, a consumer K has income I. He wants to purchase two goods, cloths and foods. Let he spends IC for cloths and IF for food such that

IC + IF =I

If unit prices of cloths and foods are PC and PF respectively then he can purchage IC/PC cloths and IF/PF foods to satisfy his need. If he had not more requirement of cloths then he can spent less on cloth and more on food and can satisfy his needs without expending more. Thus for his fixed inocme I, he can purchage different bundle of foods and cloths to satisfy his need without expending more than I.