How to compare and choose keywords

Online Tech Tip's article Get keyword ideas using the Google Keyword Tool explains how to use Google's Keyword Tool:

If you are a starting up a new web site and the competition is strong, it is a good idea to start with keywords with less competition then work on those higher volume keywords later...Another cool feature of this tool is that it can show you the average cost each time a user clicks your ad on the associated keyword.

In the example below, let's say I'm an engineer and want to start consulting. I see that the cost per click (CPC) for the word consulting is $3.27. But because I'm on a tight budget, I opt for consulting engineers at a CPC of $2.22.