(1) $p$ and $q$ is chosen as: $p = 11, q = 13$, then $n = pq = 143$.
(2) $\lambda (n) = \lambda (143) = lcm (p-1, q-1) = lcm (10, 12) = 60$.
(3) Find $e$ that $gcd(e, \lambda(n)) = 1$, which means $e$ is coprime with $\lambda(n)$, choose $e = 7$, for 7 and 60 has no common divisors other than 1.
(4) Find $d$, that $de \equiv 1 \pmod {\lambda(n)}$, choose $d = 43$, since $de = 43 \times 7 = 301$, and $301 \equiv 1 \pmod {60}$.
(5) So, public key is $(e = 7, n = 143)$, private key is $(d = 43)$.
(i) Encrypt specific $(m = 7)$ with public key $(e = 7, n = 143)$:
$$c = m^e \pmod n = 7^7 \pmod {143} = 823543 \pmod {143} = 6$$.
(ii) Decrypt $c$ (= 6) with private key $(d = 43)$:
$m = c^d \pmod n = 6^{43} \pmod {143}$ = 2887378820390246558653190730940416 (mod 143) = 7.
How does RSA work, I will use $(k_1, k_2, k_3, ...)$ to represent a integer that we don't care its value.
Consider a plain message $m$ ($m$ < $p$, $m$ < $q$), thus $m$ is coprime with $n$ (= pq), $e$ and $d$ is chosen as: $ed \pmod {\lambda (n)} = 1$, assume $ed = k_1 \lambda (n) + 1$.
$$m^{ed} = m^{k_1 \lambda (n) + 1} = {(m ^ {λ(n)})}^{k_1} m$$.
As Carmichael function's definition: $m ^ {\lambda (n)} \equiv 1 \pmod n$, assume $m ^ {\lambda(n)} = k_2 n + 1$
$$m ^ {ed} = (k_2 n + 1) ^ {k_1} m = (k_3 n + 1) m \equiv m \pmod n$$.
So:
$$m ^ {ed} \pmod n = m$$.
When encrypt, $c = m ^ e \pmod n$, assume $m ^ e = k_4 n + c$, then:
$$m ^ {ed} = (k_4 n + c) ^ d = (k_5 n + c ^ d) \equiv c ^ d \pmod n$$.
Since we already know: $m ^ {ed} \pmod n = m$, so:
$$c ^ d \pmod n = m$$.
That is the decryption process.
And with a chosen $(e, d)$, obviously, for any integer $k_1 \ge 0, k_2 \ge 0$, the $(e + k_1 \lambda (n), d + k_2 \lambda (n))$ key serials are all valid and equivalent.
How can a hacker peek your message? Anyone will know public key ($e$, $n$), if he want to decrypt cypher text, he must know $d$, that means he find out $p$ and $q$ that $n = pq$, then he can guess the private key $d$ with the relation $ed \equiv 1 \pmod {lcm(p-1, q-1)}$. When we generate key pairs, we choose very big prime number $p$ and $q$, so if a hacker want to find out $p$ and $q$, it is a relatively difficult problem for today's computer (for eg, if given a public key with $n$ = 143, it is very easy to find out that $n$ = 11 * 13.). But if give a person enough long time and a large amount of computers to find result simultaneously, he will finally get $p$ and $q$, so I think we should update our key pair after a period of time.