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The whole question is:

c. Is the beneficiary an H-1B nonimmigrant exampt from the Dept. of labor Attestation requiremnts? No  Yes
     1. If yes, is it because the beneficiary's annual rate of pay is equal to at least $60,000? No  Yes
    2. Or is it because the beneficiary has a master's or higher degree in a speciality related to the employment? No    Yes

Here the "Exampt" does not mean "H1 cap-exampt", but "exampt from the Dept. of labor Attestation requiremnts". See: http://cfr.vlex.com/vid/655-737-attestation-willful-violator-19660317

Because your degree is master or higher, your answer is say "yes" to the Question "c." and Qestion "2", and say "No" to the Question "1".