Answer from cs61c-am (Michael Moeng 16464697) for Question 2
A digital clock, it changes from each state to the next state, and outputs its value.

Multi-brightness lights, they always change states in the same order, from one to the next, and their output is the amount of light emitted.

A wind up thing (toy, clock, whatever), you can only wind it up in one direction (next state), and the output unwinds it.