Role of Consumption Costs in Economics Analysis

Past studies on consumption often overlook consumption costs, regarding it as prices of goods or services. In this paper, we firstly redefine consumption costs and demonstrate its significance by revealing its relations with different branches of economics. Then, in an attempt to perfect consumer choice theory, we employ 'cost-benefit' analysis pattern under the assumption of consumption costs minimization given certain utility level. Next we examine the role of consumption costs in consumers', firms' and government's decisions separately. Finally we conclude its importance in economics analysis as well as decisions of different economic agents.