Functional diversity is driven the Principle of Allocation which states that each individual organism has a finite (limited) quantity of resources that it can use for all necessary life processes, including growth, reproduction, acquiring nutrients and resources, escaping predators or pathogens, etc. Resources such as nutrients or energy that an individual invests in one process cannot also be invested in other processes, meaning that not all life functions can be simultaneously maximized. This is sometimes referred to colloquially as a ‘zero sum game’ meaning that any increase in investment towards one process must be balanced by a reduction in the investment in another process, so that the sum of the changes is zero. You are already familiar with the principle of allocation through the concept of time. Each individual has 24 hours each day to invest in all the tasks that need to be accomplished. The more time a student invests in studying, for example, the less time is available for other tasks, such as sleeping.
The principle of allocation leads to trade-offs, which are the relationships between the benefits of resource investment decisions in one context compared to the costs of those decisions in another context. To use our previous example of time, investing more time in social activities may increase the number of friends you have (benefit), but will also decrease the amount of time available to study and likely result in lower grades (cost). Different species balance the principle of allocation and its associated trade-offs differently, resulting in a wide variety of strategies and traits that organisms use to accomplish life tasks. This variety of strategies and traits contributes to the diversity of species that exist on Earth.