Indifference curves are a graphical representation of a consumer's preferences. It represents different combinations of goods or market baskets that provide the same level of satisfaction to the consumer. The term 'indifference' shows that the consumer is indifferent towards the various market baskets as she is equally content with all combinations of goods represented on a single curve.

For instance, a consumer's two favorite items are pizza and cookies. The consumer has two distinct baskets. Basket A has three slices of pizza and one cookie. Basket B has two slices of pizza and two cookies. The consumer will pick the one depending on her preference for pizza over cookies or vice versa.

Further, consider three baskets: P, Q, and R. Basket P has one slice of pizza and ten cookies. Basket Q has two slices of pizza and six cookies. Basket R has four slices of pizza and three cookies. If these baskets give the same satisfaction to the consumer, they lie on the same indifference curve. All combinations of pizza and cookies that provide the consumer equal satisfaction are joined to get the indifference curve.