Step 1: Concept
The order of a differential equation is equal to the number of independent arbitrary constants in its general solution.
Step 2: Analysis
General solution: $Ax^2 + By^2 = 1$.
There are 2 constants ($A, B$), so the order is 2.
Step 3: Differentiate twice
1st: $2Ax + 2Byy' = 0 \implies Ax + Byy' = 0$.
2nd: $A + B(y y'' + (y')^2) = 0$.
Eliminating constants leads to a linear differential equation in $y''$.
Step 4: Conclusion
Order 2, Degree 1.
Final Answer:(A)