Geography affected the colonial economies in a number of ways. Let us look at a few of the more important ways.
First, geography determined where important cities would be cited. In those days, cities tended to arise in places with good harbors on the ocean and or places that were located at important sites on rivers. For example, Boston and New York City were both cities with good harbors at the mouths of rivers.
Second, geography determined that New England would not be a major grain producing area and that colonies like New York and Pennsylvania would be. This was because of the climate and the soil of those areas.
Finally, geography had a great deal to do with making the South into an area with unfree labor working on large plantations. This was because the South was a place that was very hot and humid and that was home to diseases like malaria. The climate was good for staple crops like rice and tobacco, but it was very hard to find people who were willing to work on those crops in that climate. Therefore, indentured servants and then slaves were brought in to work the plantations.
In these ways and many others, the geography of the colonies affected the economic development of the various regions.