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The choke is off when pushed forward toward the front wheel. The idle is adjusted with the white knob on the carb. Adjusting the cables is for correcting the cable stretch over time to take up the slack.
The engine should be warmed up with the choke off to adjust the idle. 1200 rpm's is about perfect.
If the bike was ridden a lot with the choke on I would be very sure to change the oil soonest.
While you are at it and have the time, go over the bike for all working lights, loose or missing fasteners, chain and sprocket condition(lube and adjust), air pressure according to sticker, tire condition(should be free of cuts and bulges plus the age of the tires). If the tires are original they are too old for safe riding and will try to hurt you.
Oh..............there are no stupid questions.
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