Explain how this code for Arduino works and construct a circuit based on this

//variables

int YELLOW = 3;

int RED = 4;

int DELAY_YELLOW = 1000;

int DELAY_RED = 1000;

// basic functions

void setup()

{

pinMode(YELLOW, OUTPUT);

pinMode(RED, OUTPUT);

}

void loop()

{

yellow_light();

delay(DELAY_YELLOW);

red_light();

delay(DELAY_RED);

}

void yellow_light()

{

digitalWrite(YELLOW, HIGH);

digitalWrite(RED, LOW);

}

void red_light()

{

digitalWrite(YELLOW, LOW);

digitalWrite(RED, HIGH);

}