When you say physical capital, it refers to the additional machinery, building, space etc.
Therefore an example of changing physical capital is B. Building extra space in the factory. By doing this, you are adding additional physical location in where your employee or worker can work.
It allowed farmers to plant water wherever, and help make dry soil more suitable for planting overall.
Yes, because one system would have to much power and be able to have full control and do whatever they want. This would lead to corruption and tyranny.