Help with Sound Settings on Macbook

I use Skype and I have a mic/headphone combo, and I just cant my mac to accept sound though the mic, I hear through the headphones, but however i change my sound settings, the sound always go through the macbook, never directly from my mic its annoying as there is always so much background sound. There must be a way, and this is my second macbook, and the first one was exactly the same.

Any suggestions would be gratefully received.