The no. of ways to make a mixture of 2 or more colors is nC2 + nC3 ... nCn <= 500.
Now, add nC0 + nC1 = n+1 to both sides. This gives 2^n <500+n+1. Now just find the smallest integer n which solves this problem. Answer comes to (A) 8.
To check, see that 2^9 does not satisfy the inequality.