$r^n$ counts the ways $n$ independent choices from $r$ options can be made.
So, the probability for: a selection of _three_ people to make a choice from _one_ option, and _four_ people to each make a choice from _four_ other options, when _seven_ people each make a choice from _five_ options, will be: $$\dbinom 73 \dfrac{4^4}{5^7} = \dfrac{7!}{\lower{0.4ex}{3!~4!}}\dfrac{1^3~4^4}{5^7}$$