It is not needed to install alsamixer. The problem is, that Skype doesn't know where to listen and there is no option how to say in Skype environment directly. Install PulseAudio Volume Control from Ubuntu Software Center or via Synaptic.
Start Skype and choose Options from blue down. Select Sound Services. Check if both three options (Microphone, Speakers, Ringing) has setted PulseAudio Server (local). Uncheck Allow Skype to automatically... to prevent too silent sound.
Click button Open PulseAudio Volume Control, it should be visible down (if not, open it clasically from menu).
In opened PulseAudio Volume Control application click tab Input devices and check, if microphone is functioning (it is visible on the horizontal scale).
Than click tab Recording. The page should be empty (no another device is recording). In Skype call Echo/Sound test service, or call somebody, who is able to endure on line. This is only that way, how to set up microphone! During the session in Volume Control is visible what is recording. Push button in upper right corner and choose your web camera microphone input from list.
In next session Skype should remember those settings, so it is not needed to do this setting always. I suppose, that it is stored in ~/.Skype directory for further session. Tested on Ubuntu x86-64 13.10, 14.04, Skype 220.127.116.11.
Get Skype so you can talk for free over computer
If your friends have computers, you can all use Skype to talk for free. You can even do video calls for free if you have webcams. Otherwise you need a microphone and speakers to use it as a "speaker phone" or get a headset. Or get a webcam with a built-in microphone, you can use that as a mic/speakerphone too without using the video.
You can even make regular calls to phones on Skype for 2.3 cents a minute or pay like $30/year for unlimited domestic calling out. If you are near a computer enough, that might be enough to cushion your 1000 minutes/month. Use the cell when you aren't near a computer.
Skype is FREE for computer to computer use
Just go to Skype.com and download the app, then sign up for an account. That allows you to make free computer to computer calls - to someone else with Skype. I use it all the time to make video calls to a friend a few states away, for hours, all for free.
I have a webcam with a microphone, and the audio quality is fantastic, far better than a regular phone. But you can get a bluetooth headset (I have a crappy one that came free with my cell phone that I tried and it works but I'd never use it).
To use Skype for regular phone calling, you have to add on two services: SkypeIn where you can buy a telephone number ($38 a year, I just got a number) and SkypeOut, which is $28(?)a a year I think, I don't have that but it lets you call out to any phone unlimited domestic long distance