A small microphone with amplifier & threshold setting. It can detect when sound reaches a certain level. It can not detect a particular frequency and there is no support in the micro:bit programming environment at present for it to analyse the incoming analog output.
The black lead goes on to GND, the red lead goes on to 3V and the green lead goes on to the Pin 0, 1 or 2 as required. The yellow lead will be removed as the analog output is too small for the micro:bit to register.
It provides a digital signal depending on the setting of the pot on the board. This pot is multi-turn so it is normal for it to go round several times. There is a power LED and an active LED that shows that the sound level has been reached. It would use the digital input blocks.
It can act as a quiet detector (!) by inverting the digital read – so that if it’s 0, it means it is quiet.