Yeah you just wanna be limping here with small pairs. Especially in low buyin tournies - a raise doesnt thin the field, it just sweetens the pot.
As to calling a raise, you need to be looking at the implied odds. Its about 7.5 - 1 to hit your set, so you only want to be calling raises if they have about 10 times their raise left in their stacks or more. (this is to account for the times where you hit but either get beaten or dont get paid off).
Position isnt really that important, as if you do hit a set is strong enough to play out of position.
Although, if it gets folded round to you in late its maybe worth a raise to try and take it down there and then, because small pairs work best in multi way pots with lots of limpers, and you lose a lot of implied value if theres only a few left in the hand.