[This is part of the series: The Complete Guide To Economics 101.]

In economics, indifference curves are a thing.

What are they?

An Indifference Curve is a graph that represents different quantities of goods and services.

Along the curve itself are points where a person is indifferent to the quantity received.

For example, one might be indifferent between the following:

It a simply boils down to preferences.

[This is part of the series: The Complete Guide To Economics 101.]

What is a budget constraint?

A Budget Constraint is the limit to what one can afford.

To simplify this idea, it is usually depicted by a simple line showing the trade-off one faces between two goods.

For instance, maybe I can spend my limited budget on 100 cups of coffee, 200 cups of tea, or some trade-off in between.

The slope of this trade-off line depicts the rate of the trade-off between the two goods.