A: B:
There are 5 basic SCALE/CHORD POSITIONS (ie; shapes) on the guitar. They are refered to as the C.A.G.E.D. positions. All the scales and chords can be accessed directly, or through a combination of these 5 shapes. Notice how the shapes link together up and down the neck. Whichever position you start with, the next type up(CAGED) or down(DEGAC) will follow the pattern!

 The CAGED Concept

  The "CAGED" system is inherent to how the guitar works - in standard tuning of course - whether we recognize it or not!.
  The "CAGED" system is just an other way of seeing the fretboard, and the connections between the basic scale/chord forms.
  REMEMBER: "CAGED" is based on the OPEN forms that we all use when playing any chord. For example; when you play an "F" chord,
  down near the nut, it looks (is shaped) like an "E" chord, but one fret higher. There is no "F" type chord.
  That same principle works for all the chords up and down the neck.
  If you start with an open "C" chord, what would the next "C" chord up the neck look like?
  That would be an "A" form barred at the 3rd fret. Next would be the "G" form barred at the 5th fret (a bit of a stretch, yes),
  followed by the "E" form ( most guitarists favourite form!) at the 8th fret, then the "D" form at the 10th fret (another stretch!),
  and finally, the "C" form again, barring at the 12th fret.

  Please note: there is no rule that says you can't mix the forms. These would be considered "Half Positions".

  For example; suppose you wanted to play a really sweet jazz chord named "CMaj7(add6)", voiced from the low strings to the high strings
  as 5,1,3,7,3,6(G,C,E,B,E,A). You could use a combination of "C" and "A" forms from the 2nd through the 5th frets.