AWS is not expensive, not at all. However, you can combine GAE and AWS where serving all HTTP from GAE and doing the "rest" on Amazon - that will make it some cheaper
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Depends what AWS service you talk about. Having one slow EC2 instance online 24/7 for a month will cost you roughly 60 dollars. I don't think that is very expensive but considering the available options I also don't think it is cheap. At Mosso you get a similar host for 1/6th of the price these days for example. Charged by the hour.
Anyway, it depends on the specific AWS service.