The price they quoted you is, quite frankly, absurd. But it wouldn't be just for labour, at least not if they plan on doing it right.
There would be some materials needed to make sure they are sealed up properly so you don't end up with that same heat leakage problem because the window all by itself won't do it, but it wouldn't be a lot either.
I would definitely look around if I were you. I'm not in the business of doing this kind of work but I will tell you that when we install basement windows in a newly framed house it doesn't take more than a few minutes. There would obviously be more work on an already finished home, but that price in this economy is a good reason to find another option.
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