Picking a yarn can be more complicated than you think. My test is to touch each ball of yarn and to see if I like the feel of it in my hands. After all, you will be holding that yarn for hours, possibly months. If you don't like how the yarn feels, then your knitting experience with it will be awful. The second test I do is I put the yarn against my neck, especially if I'm working on a scarf or garment. 

In addition to how the yarn feels, you want to consider the type of project you're working on. When I started knitting, I bought any yarn I liked, not thinking about the project. Now I have way too much yarn. I suggest that you only buy yarn for a specific project. It helps keep your knitting focused. If you're making a dish cloth or towel, you want the yarn to be absorbent, a cotton blend would be a good option. Here is a list of fibers:

Another thing to consider is yarn weight. The larger the yarn, the faster the project will knit, but it will also produce a thicker item.

Lace Weight: Difficult to categorize, but it's the lightest yarn you can find.

Fingering Weight: a good yarn to knit items for babies. There are about 6.75=8 stitches per inch.

Sport Weight: 5.75-6.5 stitches per inch. Great for socks; slightly lighter than DK weight

DK Weight: 5.25-6 stitches per inch

Worsted Weight: the most common yarn used; great for beginners and for many projects

Bulky Weight: 3-3.75 stitches per inch. It's about twice as thick as worsted weight.

Super Bulky Weight: 1.5-2.75 stitches per inch

Happy knitting!