Each Keyword has a Match Type, either Broad, Phrase or Exact.   A Broad Match Ad will appear to searchers who search for similar phrases and relevant variations.  A Phrase Match Ad will appear to searchers who search for that exact phrase with other qualifiers.  An Exact Match Ad will appear to searchers who search for that exact phrase only.  To start, it's best to have Keywords be Broad match. 

Each Keyword also has a bid, or Cost Per Click.  This is the maximum amount that you are willing to pay each time your Ad is clicked by those using search engines.