Final answer:
An indifference curve is a graphical representation of different combinations of goods that provide the same level of utility. Higher indifference curves signify higher levels of utility. Indifference curves slope downward due to diminishing marginal utility.
Step-by-step explanation:
An indifference curve is a graphical representation of the different combinations of two goods or services that provide the same level of utility or satisfaction to a consumer. All points along an indifference curve are equally appealing to the consumer. Higher indifference curves represent higher levels of utility.
Indifference curves slope downward because of the principle of diminishing marginal utility. In order for the utility to remain constant, a reduction in the quantity of one good must be offset by an increase in the quantity of the other good.
Indifference curves are steeper on the left and flatter on the right due to diminishing marginal utility. This means that the consumer is willing to give up more of one good to obtain additional units of the other good when they have a smaller quantity of that good.