I meant Chinese clones. Arduino is Open Hardware, it's perfectly legal (that's kind of a point of Open Hardware movement). It's equivalent in form and function to the genuine Arduino made in Italy.
But if you are not planning on using shields you can get arduino mini for ~$1.3 or nano for ~$1.8
You can get a Pro Mini clone for less than $1.50.
A full-size Arduino R3 clone (with a cheaper USB chip, the CH340G) is less than $3 with free shipping.