Yes people do click on Facebook ads and they convert extremely well when utilizing Facebooks targeting correctly. I have ran very targeted ads on FB that have achieved a 20% CTR and 10x ROI. This was for a product appealing to 8 to 12 year olds. I targeted Moms with kids in this age range in specific locations and who fell within a certain income.
Other small business ads such as local coffee shops, restaurants, etc. that advertise deals/coupons also convert very well and get shared like crazy.