Learn Icelandic: Allt í lagi, ekkert mál!

Literally, it means "everything in order". Allt means "everything", í means "in", and lagi comes from the word lag, which means "order", "shape", or "layer".

Why does lag change to lagi here?

In Icelandic, small words like prepositions force the nouns that follow them to change their ending (this is called grammatical case). The preposition í (in) makes lag take the dative case, changing it to lagi.

Does ekkert mál literally mean "no problem"?

Close! Ekkert means "nothing" or "no", and mál means "matter", "issue", or "case". So ekkert mál literally translates to "no matter", which is used exactly like "no problem" or "no worries" in English.

Could I use ekki instead of ekkert to say "no problem"?

No, because ekki means "not" and is used to negate actions (like "I do not know"). To say "no" directly before a noun like mál, you use ekkert, which means "nothing" or "not any".