Explanation:

Box 1: 3
Scenario: App1 must meet the following requirements:
* Be hosted in an Azure region that supports availability zones.
* Maintain availability if two availability zones in the local Azure region fail.
A host group is a resource that represents a collection of dedicated hosts. You create a host group in a region and an availability zone, and add hosts to it.
Use Availability Zones for fault isolation
Availability zones are unique physical locations within an Azure region. Each zone is made up of one or more datacenters equipped with independent power, cooling, and networking. A host group is created in a single availability zone. Once created, all hosts will be placed within that zone. To achieve high availability across zones, you need to create multiple host groups (one per zone) and spread your hosts accordingly.
Box 2: 1
Scenario: App1 must meet the following requirements:
* Be hosted on Azure virtual machines that support automatic scaling.
An Azure virtual machine scale set can automatically increase or decrease the number of VM instances that run your application. This automated and elastic behavior reduces the management overhead to monitor and optimize the performance of your application.
Reference:
https://docs.microsoft.com/en-us/azure/virtual-machines/dedicated-hosts
https://docs.microsoft.com/en-us/azure/virtual-machine-scale-sets/virtual-machine-scale-sets-autoscale- overview