I agree an disagree with this answer...
What I disagree with is that, since it is without replacement you cannot say that there are still 8 values when y=1.
That because if you take x=1, then you get:
1 to the powers of 2,3,4,5,6,7,8,9,10 (which is equal to 1, one digit, so accpeted). 10 integers used (including 1).
You can use 2 to the power of 3, but then not 3 to the power of 2 (same numbers used). So, 10+1=11.
If y=1, then you get:
2,3,4,5,6,7,8,9 to the power of 1 (which is equal to 2,3,4,5,6,7,8,9, accepted). However, 1^2 and 2^1 use the same 2 numbers (1 and 2) that you used above for x=1. So, since there is no replacement, these numbers shouldn't be available. Right?
On the other hand, I understand your approach and that if you have y=1 then you can only use 8 numbers.
I also agree with the use of 2 and 3. However, to me, the rule of replacement has been violated...
So, I would say that A should be the right answer...
It would be great if this question could be discussed and we could have the correct answer...