Can someone confirm this?
Sorry if it looks messy, I don't know where to find the math notations.
** x represents the cartesian product
P({1,2}) x P({3})
= {{1},{2},{1,2},{}} x {{},{3}}
= {{{1},{3}},{{2},{3}},{{1,2},{3}}}
I first calculate the power set of each set and then find the cartesian product.
This is what I could think of in terms of approaching this question; however i'm not very confident with my answer.

Your approach is correct. You did not expand the Cartesian product correctly. The output of the product is a set of ordered pairs, while you show a set of two element sets. You have four choices for the first element and two for the second, so should have eight elements in all.