I would strongly recommend that you install PAVU sound mixer
Install from Software Center:
Or install it in a terminal:
sudo apt-get install pavucontrol
Then hit alt + f2 and type
pavucontrol and up should come the launcher for PAVU which you can use to make sure your sound control and inputs are all correct.
Under input you will see probably see the internal mic named and either muted or turned right down. See if that will help if you try to change the levels. You should see it react to external noises ( ie you!) with the monitor responding to you coughing or tapping the keyboard.
You can of course use
gnome-volume-control as well which is what you will find if you click the volume bar at the top of your panel and select 'sound preferences'