Google only pays to the Ad clicks received on your website/blog. However, Google also serve some CPM based ads (but, we don't have any option to choose cpm ads only). So, google will pay mainly for Ad clicks and sometimes for impressions (based on 1000 impressions).
@rajforever: That's CPC. It depends on content quality, but RPM depends on CPC and more different factors such as CTR which also depends on how well your site is built, where are ad units placed, how they look like, and so on.