I am a software engineer studying business finance for the first time. I am really struggling with this chart. It's supposed to be the "two period model" showing the complete consumption tastes and preferences of individuals in a two-period world.
What gets me is that both the X and Y axes are marked as being $.
Can you please explain what the chart is actually showing? What does each point in the curve actually represent, and why/how does so?
ADDED: After reading the wikipedia page about it, I understand that the curve is meant to plot the points where a person is satisfied. So, it might have more of X and less than Y and still be happy -- or vice versa. So, I guess this is now applying the same concept but rather than having two different products, it's the amount of money in two different periods... am I on the right track?