There will be 28 handshakes. If you ask each person how many handshakes they had they will tell you 7 making 7 x 8 = 56 handshakes in all. But every hand involves two people, so every handshake has been counted twice, thus there are 56 / 2 = 28 handshakes in all.
With 3 people, there are only 3 handshakes: AB, AC, and BC. Where it gets interesting is at a party with, say, 10 people ... 45 handshakes. Or in the US Senate when all 100 Senators are present ... 4,950 handshakes.
There will be 45 handshakes (assuming that each person doesn't repeat who they shake hands with). Use the following formula for this one (n*(n-1))/2 where n is number of people...so if 10 people its (10 x 9) / 2 = 45 handshakes, if 7 people its (7 x 6) / 2 = 21 handshakes etc.