f my wife and i are filing married filing jointly but her parents are claiming her as a dependent what do i do when it asked if she is a dependent

If you decide to file jointly, that decision completely trump's the mother's wish to claim her child as a dependent, even if the child would otherwise meet the age and support requirements.  The only time joint filing does not trump the parent is if the married couple are not "taxpayers" -- meaning, they owe no income tax, only file a tax return to claim a return of withholding, and claim no other credits, dependents or tax benefits.  

For the mother to claim her child as a dependent, the child must either,

a. file as married filing separately and check the box for "yes, I can be claimed as a dependent" (in which case the spouse must also file as married filing separately, or

b. the spouses file jointly but are not "taxpayers" this year.  She would still check "yes, I can be claimed as a dependent" in this case.

Note that if you decide to file separately, there are some credits and deductions that are limited or disallowed for MFS, and the tax rates are higher.