The 1 is the lookup value here...

the two conditions, ($A$2:$A$10=A11) and ($B$2:$B$10=B11) create an array of TRUEs and FALSEs depending on if the separate matches are found...

multiplying the 2 together, like so, ($A$2:$A$10=A11)*($B$2:$B$10=B11),

will coerce the TRUEs/FALSEs to 1s and 0s, respectively... and at the point where both arrays have a 1, is the point where a match of the 2 criteria is found in the same row... the internal INDEX() functions, re-creates the array for the Match() function to look up against... so Match(1,....) looks for the postion of that 1 where both criteria are met together .. and returns the position number which is then indexed on the outside INDEX() array...

so, you shouldn't get #NUM error if you entered the ranges and reference correctly. At most you would get #N/A if a match is not found.