Given as seven flags are available and out of which two are needed to make a signal.
Now from this, we can say, that we have to select two flags out of seven and arrange these two flags to get one signal.
Seven flags of different colours are available, therefore first flag can be selected in 7 ways.
Then, the second flag can be selected from any one of the remaining flags in 6 ways.
Thus, the required number of signals are 7 × 6 = 42.