Find the number of seven-letter words that use letters from the set $\{\alpha,\beta,\gamma,\delta, \epsilon\}$ and contain at least one each of $\alpha$, $\beta$, and $\gamma$.
My attempt: using inclusion/exclusion
Let A denotes $\alpha$ is missing, B denotes $\beta$ is missing, and C denotes $\gamma$ is missing. Then, $$\begin{aligned}|A\cup B\cup C|&=|A|+|B|+|C|-(|AB|+|AC|+|BC|)+|ABC|\\ &= 2^7+2^7+2^7-(1+1+1)-0\\ &= 381\end{aligned}$$ $|U|= 3^7 (\text{No restriction on the combination of words})$
So, $$\begin{aligned} |U|-|A\cup B\cup C|&= 3^7-[2^7+2^7+2^7-(1+1+1)-0]\\ &= 1806 \end{aligned}$$
I'm not sure if I'm doing this problem correctly at all, because I think the universal set, i.e $|U|$, should be $5^7$ and I not sure if my calculation needs to include the other elements as well. I'm just second guessing myself. Please help me. Thank you.
Your strategy is correct, but I don't agree with the figures.
$|U|=5^7$ as you correctly second-guessed.
$|A|=|B|=|C|=4^7$ since you are forming 7 letters words with an alphabet of 4 signs.
$|AB|=|BC|=|AC|=3^7$ since you are forming 7 letters words with an alphabet of 3 signs.
$|ABC|=2^7$ since you are forming 7 letters words with an alphabet of only 2 signs.
Hence the result is $5^7-3*4^7+3*3^7-2^7=35406$