Draw out a number line. Start at 0. Then move 7 units to the right to represent gaining 7 yards. The end zone is somewhere off to the right.
Then move 8 units to the left to represent losing 8 yards. So we're moving away from the end zone. You should end up at -1 on the number line.
This means 0 + 7 - 8 = -1 or simply 7 - 8 = -1
At the end of the second down, the team has lost 1 yard.
Check out the diagram below. The diagram is something you can draw for your teacher, or you can verbally describe what's going on.