I guessed on this one and got it right. Later I figured it out, so I want to share.
The main factor here is the constraint that the switch which equals the number of switches on must also be on.
We know that 1, 3 are out. so the max number of in is now 5. If 5 is in then 1 and 4 is out and we are down to three in. We already have 3 out, so that forces that cannot be in.
4 also would force two out and leave 3 in, but three is out. so 4 does not work.
We are left with (A) which gives us 2 and 7, which works because we can have two in.