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I checked it out myself and you can decide for yourself which type of instance you want to deploy. The default was micro (the cheapest) and 3 nodes.

Cited from the setup page:

This interface allows you to deploy one or more MongoDB server nodes and one or more arbiter nodes as part of a single MongoDB replica set. By default the replica set will contain 2 data-bearing server nodes and 1 arbiter node.

A short-lived "Deployment Coordinator" Compute Engine instance will be created to manage instance setup.

Are they intending this is used for development only? I see numerous places where they remind you to delete your app when done, but nothing about what to do when you want to deploy for production?

Yea, it's kind of odd they don't explain some of these things in more detail on their site. If they do then maybe I'll invest some time playing around with it

I would assume std compute engine pricing:

https://developers.google.com/compute/pricing