It consists of a variable resistor and a fixed resistor. The output voltage is dependent on the ratio of the two resistors. For example, when the two resistances are the same, the output voltage is half the input voltage. When the variable resistor is much less than the fixed resistor, the output voltage is very close to the input voltage. When the variable resistor is much greater than the fixed resistor, the output voltage is closer to ground.

When picking a value for the fixed resistor, consider the range of your variable resistor. If the variable resistor can go to 0 ohms, then you need a reasonably high fixed resistor to avoid a short. If your variable resistor's range is always fairly high, and never goes to 0 ohms, you're not in danger of a short, so a lower fixed resistor might be okay. When the fixed resistor's resistance is in the same order of magnitude as the variable resistor, your output voltage will always end somewhere around the middle of the input voltage range. You may lose some resolution that way, but you're reasonably guaranteed to avoid a short circiut.