Using the iphone as a phone - a mundane question

This should be very basic, but I don't get it, so here it goes....

Is it possible to use the iPhone like a regular phone (holding up to the ear)? I know it works great with the headphones/bluetooth/speakerphone. But it is possilble to hold a private conversation without something plugged into the phone? And is the speaker and microphone at the bottom? Do you guys hold the phone upside down to listen when you're using the phone outside, because I find the speaker isn't very loud.

Thanks!

This is so funny. My wife (she has and iphone too) and I are calling each other trying to figure this out. Without the speakerphone, we can hear each other faintly but only if it's really quiet. We can't quite figure out where the sound is coming from or how to adjust it. Any help would be appreciated.

Figured it out!

Duh.

We both left on the plastic (original) to protect the face of the phone, so it's been muffling the handset speaker. Duh. My bad.

Problem solved.