Â£36 is that per day / week / month ? whats the url of the website?
The cost of the keywords is based on several factors, one of the most important factors is "Quality Score"
"The AdWords system calculates a 'Quality Score' for each of your keywords. It looks at a variety of factors to measure how relevant your keyword is to your ad text and to a user's search query. A keyword's Quality Score updates frequently and is closely related to its performance. In general, a high Quality Score means that your keyword will trigger ads in a higher position and at a lower cost-per-click (CPC)."
Id recommend reading through the ad-words documentation, if its a little to dry for you and you want to take advertising seriously you need then do two things. Increase your budget and hire a professional.
If you're selling TVs for example, buy the model number keywords. This is because:
1) 'SAMSUNG LE40C750' will be far far cheaper than 'LCD TV'
2) Someone who searches for the exact model name already knows what they want, and more likely to purchase than someone just browsing for 'LCD TV'
Testing, split-testing, testing and split-testing again
Split your ad groups down into separate ads, use negative keywords to get your relevant keywords being displayed, improve your CTR to reduce your PPC.
As for initial keyword research, the Google Keyword Tool is pretty good as a starting point.
Â£36 is not a lot I'm not sure what type of products or services you sell but Google adwords charges by the click so if you bid on the keyword 'SAMSUNG LE40C750' then you have to pay every time someone clicks this kind of keyword could cost you around 40p - 60p so for Â£36 you would only get around 90 clicks so in order to get a sale for your Â£36 you need a conversion rate better than 1.1%.
You need Market Samurai It weedles out high search volume keywords that have low competition. It's intuitive and easy to use. Cracks of it are floating about (I had to mention that, a because thats what i use and b because i wanted to make sure nobody thought I was trying to sell it somehow) Its honestly worth it even if you buy the paid version.
Pointless post as the op hasn't bothered to come back and stipulate the budget time-line and product/service ... I'm just being cranky as i like to help folk, but get annoyed when they don't try to help themselves