Which two economic principles significantly influence land use within a metropolitan area?

Transportation costs and capital improvements are two critical economic principles that significantly influence land use within a metropolitan area.

Transportation costs affect how easily goods and people can move within an area, which in turn influences where businesses choose to locate and how residential areas are developed. Areas with lower transportation costs are often more attractive to both residential developments and commercial enterprises because they enhance accessibility and reduce operating expenses.

Capital improvements, which include investments in infrastructure such as roads, public transit systems, water and sewer facilities, and schools, play a substantial role in shaping land use. When a metropolitan area makes significant capital improvements, it often leads to increased property values and can spur further development. Improved infrastructure enhances connectivity and supports higher densities of development, leading to urban growth and changes in how land is utilized.

In contrast, the other choices do not capture the foundational elements as accurately. Environmental impact and zoning regulations are certainly relevant but focus more on compliance and management aspects rather than direct economic influences. Population density and infrastructure availability are interconnected with the concepts of transportation and capital improvements but do not represent underlying economic principles themselves. Real estate taxes and interest rates primarily influence financing conditions rather than directly shaping land use patterns.