Final answer:
By-products in a joint production process are minor outputs with minimal quantity and value, correlating with Option 2. In production, such as pizza making, various inputs including labor and raw materials like flour and cheese are used. The marginal product of labor is significant, especially in the short run, for determining optimal production levels.
Step-by-step explanation:
The student's question is related to the concept of by-products in the context of a joint production process. By-products are the additional outputs that are produced alongside the main product. According to the definition provided, by-products are those outputs that are minor in both quantity and/or value when compared to the main product. This corresponds to Option 2: Outputs with minimal quantity and value. By-products contrast with the main outputs of a production process, which are produced at a larger scale and hold a greater value.
In the pizza making example provided, the main inputs or factors of production would be flour, water, yeast, tomatoes, spices, cheese, and other toppings which are used to create the output - the pizza. During production, the pizzaiolo's labor is the most easily varied input in the short run, thus labor is considered a variable input. The marginal product is critical as it indicates the additional output realized when one more unit of a variable input, usually labor, is added to the production process. Diminishing marginal productivity eventually occurs when the contribution of additional labor results in less incremental output than previous increments due to fixed capital.