There is confusion here as the question is being interpreted in ways not mentioned in the question. Be careful.
You use 7^9 if: each person can pick one of those 7 ball types and those types can be repeated. An analogy would be a slot machine with 7 items and 9 slots. A red ball showing in slot #1 may or may not show up in slot #5. Here you would use 7^9 or 40+million
You use 9C7 (9 choose 7 for COMBINATIONS) if: each person can pick one of those 7 balls --each person can only have maximum one ball. The formula is 9! / ((9-7)! 7!)= 36
You use 9P7 (9 pick 7 for PERMUTATIONS) if: each person can pick one of those 7 balls and each of those 7 balls were a different color. In a combination, the following is considered one combination: the first 7 guys have a ball but the last two don't. But In a PERMUTATION, this single order could translate into a bunch of permutations with the different colored balls. The first 7 guys still have the balls and the last two don't. Same scenario. Except now these first 7 guys can form a bunch of different color combinations in different orders. #1 can have white ball, #2 can have red ball, etc; and then #1 can have red ball and #2 can have white ball, etc. In this case, the formula is: 9! / (9-7)! = 181,440 (a very large number)
So you can see there's 3 ways to look at this question. Be careful on variations/combinations/permutations.