Module 2 Understanding Resources and Principles

Module 2 Understanding Resources and
Principles
LESSON 1 : RESOURCE THEORY
Prepared by:
Leslie Anas
Bea Jade Abucay
Introduction
Resource management has a long history and an interdisciplinary base borrowing

from and contributing to such fields as economics, organizational behavior,
anthropology, psychology, and sociology. The discipline was originally called home
management-with an emphasis on work simplification and household efficiency-but
since he postmodern period (beginning in the 1960’s) the emphasis has been on
viewing the family as s social system and resource management as one of the many
functions of that system (Knoll 1963; Maloch and Deacon 1966; McGregor 2001). In
the Recent years the most widely used term to describe the field is family resource
management or more simply management. Although the family is recognized as the
fundamental societal unit, it is recognized that management principles and
techniques apply to singles as well as to families
Resource theory
We begin our discussion by outlining the usefulness of “resource theory” as a

theoretical framework for the study of family power. This framework is then used to
analyze the changes in the balance power between elderly parents and their middleage
children. With respect to intergenerational power relationships, we argue that the
autonomy of elderly parents has increased, but their power and influence over adult
children decreased. This trend is likely to continue in coming decades. Resource theory
is then utilized to analyze changes in marital power relationships as couples age. Most
studies of power relationships between elderly spouses have an important
limitation-they tend to reflect yesterday’s definition of male and female roles. Recent
changes in these roles may significantly alter the social meanings of aging for both
men and women in coming years.
Economic Resources
Economic resources are the factors used in producing goods or providing
services,
they are the inputs that are used to create things or help you provide services.
Economic resources can be divided into human resources, such as labor and
management, and nonhuman resources, such as land, capital goods, financial
resources, and technology. Economic resources are the goods and services
available
to individuals and businesses used to produce valuable consumer products
Importance of Economic Resources

An economy is a system of institutions and organizations that either help
facilitate or are directly involved in the production and distribution of goods and
services. Economic resources are the inputs we use to produce and distribute
goods and services. The precise proportion of each factor of production will vary
from product to product and service to service, and the goal is to make the most
effective use of the resources that maximizes output at the least possible cost.
Misallocation or improper use of resources may cause business
Human Resources
Labor- is one of the classic factors of production, along with land and capital,
discussed by economists for well over a century. Even in today’s technologically
advanced world, human labor is still needed to help process resources into products
or to utilize resources to provide services. Different types of labor include production
labor and service labor. An example of production labor is the classic factory worker.
Service labor includes people involved in providing a service, such as doctors,
lawyers, accountants, sales people, mechanics, and plumbers
Management- is another example of a human resource. As organizations became

more complex with the onset of the Industrial Revolution, employees were required
to oversee and manage the masses of workers engaged in the production process.
Management is a resource that is used to facilitate efficient and effective production
or operations of a business so that it can accomplish its goals. Rather than being
directly involved in production of services, managers coordinate, monitor and direct
supervisor all the way up to the president of a large multinational company.
Nonhuman Resources
Land, like labor and capital, is a classic factor or production. Land is a real estate and
all natural resources on or in it, such as trees, minerals, elements, metals, gems,
natural gas, thermal heat, oil, coal, water, and crops.
LESSON 2
PRINCIPLES IN THE USE OF RESOURCES

Introduction
This lesson discusses the principles in the use of resources. It gives focus
on scarcity and utility principles as applied in household. Scarcity, or
limited resources, is one of the most basic economic problems we face.
We run into scarcity because while resources are limited, we are a society
with unlimited wants. Therefore, we have to choose. We have to make
trade-offs. We have to efficiently allocate resources. We have to do those
things because resources are limited and cannot meet our own unlimited
demands.
Scarcity Principle Scarcity
means that society has limited resources and therefore cannot produce all the
goods and services people wish to have. Just as a household cannot give every
member everything he or she wants, a society cannot give every individual the
highest standard of living to which he or she might aspire. Economics is the
study of how society manages its scarce resources.
What is the Scarcity Principle?
The scarcity principle is an economic theory in which a limited supply of a good,

coupled with a high demand for that good, results in a mismatch between the
desired
supply and demand equilibrium. In pricing theory, the scarcity principle suggests
that the price for a scarce good should rise until an equilibrium is reached between
supply and demand. However, this would result in the restricted exclusion of the
good only to those who can afford it. If the scarce resource happens to be grain, for
instance, individuals will not be able to attain their basic needs.
Understanding the Scarcity Principle
In economics, market equilibrium is achieved when supply equals demand. However, the markets
are not always in equilibrium due to mismatched levels of supply and demand in the economy.
When supply of a good is greater than demand for that good, a surplus ensues, which drives down
the price of the good. Disequilibrium also occurs when demand for a commodity is higher than
the supply of that commodity, leading to scarcity and, thus, higher prices for that
product.If the market price for wheat goes down, for example, farmers will be less inclined to
maintain the equilibrium supply of wheat to the market since the price may be too
low to cover their marginal costs of production. In this case, farmers will supply less
wheat to consumers, causing the quantity supplied to fall below the quantity
demanded. In a free market, it is expected that the price will increase to the
equilibrium price as the scarcity of the good forces the price to go up.
When a product is scarce, consumers are faced with conducting their own costbenefit analysis,
since a product in high demand but low supply will likely be
expensive. The consumer knows that the product is more likely to be expensive but,
at the same time, is also aware of the satisfaction or benefit it offers. This means that
a consumer should only purchase the product if he or she sees a greater benefit from
having the product than the cost associated with obtaining it.
Example of Scarcity Principle
Most luxury products, such as watches and jewelry, use the scarcity principle to drive sales. Technology
companies have also adopted the tactic in order to generate interest in a new product. For example, Snap
Inc., unveiled its new spectacles through a blitz of publicity in 2016. But the new product was available
only through select popups that appeared in some cities. Tech companies also restrict access to a new
product through invites. Google, for example, launched its social media service Google Plus in this
manner. Robinhood, a stock trading app, also adopted a similar tactic to attract new users to its app.
Ridesharing app Uber was initially available only through invites. The idea behind this strategy is to place
a social and exclusive value on the product or service.
Utility
What Is Utility?
Utility is a term in economics that refers to the total satisfaction received from consuming a good or
service. Economic theories based on rational choice usually assume that consumers will strive to
maximize their utility. The economic utility of a good or service is important to understand, because it
directly influences the demand, and therefore price, of that good or service. In practice, a consumer's
utility is impossible to measure and quantify. However, some economists believe that they can
indirectly estimate what is the utility for an economic good or service by employing various models.
Understanding Utility
The utility definition in economics is derived from the concept of usefulness. An

economic good yields utility to the extent to which it's useful for satisfying a
consumer’s want or need. Various schools of thought differ as to how to model
economic utility and measure the usefulness of a good or service. Utility in economics
was first coined by the noted 18th-century Swiss mathematician Daniel Bernoulli.
Since then, economic theory has progressed, leading to various types of economic
utility.

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Module 2 Understanding Resources and

LESSON 1 : RESOURCE THEORY

Resource management has a long history and an interdisciplinary base borrowing

We begin our discussion by outlining the usefulness of “resource theory” as a

Importance of Economic Resources

Management- is another example of a human resource. As organizations became

PRINCIPLES IN THE USE OF RESOURCES

What is the Scarcity Principle?

The scarcity principle is an economic theory in which a limited supply of a good,

The utility deﬁnition in economics is derived from the concept of usefulness. An

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