Yeah, $1500 is cheap...
In fact, that's more like them buying a mass-rebuilder-built or junkyard engine and swapping it out kind of cheap instead of them rebuilding yours.
You need to ask more questions and get more details from that shop, get them to put an itemized estimate in writing for you.
Here's why:
Machine shop fees for them (most shops have to outsource some or all machining work) would run about $200 alone, a rebuild kit would be another $400-600, chemicals (oil, coolant, other fluids) would run them about $100, and anything else that needed replacing while they were in there would be added in. That's not including any markup on their part (most shops mark-up their costs on parts and outsourced services by at LEAST 10-25%)
Figuring just the parts/outsourced service alone would be roughly $900 their cost, probably closer to $1125 your cost, and the engine swap is at least an 8 hour job with average shop labor being $50-100 an hour (the dealership I work at charges $90/hour) and that's not including engine teardown time (at least 2-3 hours) assembly time (3-6 hours) and testing/tuning time (at least another hour) Just using $75 an hour for labor would put you with at least $1050 for labor (and that's figuring on the low side at 14 hours of total labor).
That's at least $2175 figuring on the low side for a shop to pull your original engine, rebuild it, and drop it back in.
__________________ 1976 Ford Mustang II Ghia: 302 with a 600cfm Edelbrock carb, Edelbrock Performer 289 intake, Dynomax Blackjack headers, 2.5" exhaust with Flowmaster Super 44s. RJS 11-gallon fuel cell, C4 tranny, chrome 16" pony wheels, fuzzy dice, brown vinyl half-top, and painted in the tackiest color ever (harvest gold, that's why I call it "The Goldenrod").
Also have a 2003 Dodge Ram (lightly modded daily driver/tow rig/office/dining room/home away from home/workshop... I call it "The Big Blue Dawg".) | 
