A good answer might be:

Because it shows time using definite digits, rather than positions of hands that have to be measured. (It would be less correct to say "because it has a computer inside.")

Binary means "two states." The two states are sometimes called "1" and "0", or called "true" and "false", or called "on" and "off", (or other names.) The essential characteristic is that a single binary device can be in just one of two possible states.

A bit is a single "on"/"off" value.

A good example is a toggle switch, such as a light switch. You can turn it "on" or "off" but not (in normal operation) anything else. A light switch holds one bit of information.

If you want to turn all the lights out in your house before leaving each morning, you merely have to check that each switch is in the "off" state. A light dimmer is not a binary device: it has many positions between "off" and "fully on". If (for some reason) you wanted each dimmer in your house to be set to 25%, you would have to carefully adjust each one.

QUESTION 2:

• The ignition switch of an automobile.
• The hour hand of a clock.
• A button on a hand calculator.
• The volume control on a stereo.