> ## Documentation Index
> Fetch the complete documentation index at: https://aitutorial.dev/llms.txt
> Use this file to discover all available pages before exploring further.

# Model Selection & Cost Optimization

> Select the appropriate model and optimize costs through caching

export const QuizQuestion = ({question, options, answer, explanation}) => {
  const [selected, setSelected] = useState(null);
  const [revealed, setRevealed] = useState(false);
  const handleSelect = index => {
    if (revealed) return;
    setSelected(index);
    setRevealed(true);
  };
  const isCorrect = selected === answer;
  const getOptionClass = i => {
    const classes = ['quiz-option'];
    if (revealed) {
      classes.push('quiz-option-disabled');
      if (i === answer) classes.push('quiz-option-correct'); else if (i === selected && !isCorrect) classes.push('quiz-option-wrong');
    }
    return classes.join(' ');
  };
  return <div className="quiz-card">
      <p className="quiz-question">{question}</p>
      <div className="quiz-options">
        {options.map((option, i) => <button key={i} onClick={() => handleSelect(i)} className={getOptionClass(i)}>
            <span className="quiz-letter">{String.fromCharCode(65 + i)}</span>
            {option}
          </button>)}
      </div>
      {revealed && <div className={`quiz-feedback ${isCorrect ? 'quiz-feedback-correct' : 'quiz-feedback-wrong'}`}>
          <strong>{isCorrect ? 'Correct!' : 'Incorrect.'}</strong> {explanation}
        </div>}
    </div>;
};

export const Quiz = ({title = "Check Your Understanding", children}) => {
  return <div style={{
    marginTop: '24px'
  }}>
      <div className="quiz-title">{title}</div>
      {children}
    </div>;
};

export const CodeEditor = ({file = 'src/hello_world.ts', lines, title = 'Code Example', repo = 'ai-tutorial/typescript-examples', height = '650px', functionName, theme: userTheme}) => {
  const STORAGE_KEY = 'openai_api_key';
  const GEMINI_STORAGE_KEY = 'gemini_api_key';
  const ANTHROPIC_STORAGE_KEY = 'anthropic_api_key';
  const PROVIDER_STORAGE_KEY = 'llm_playground_provider';
  if (!functionName) {
    console.warn('CodeEditor: functionName parameter is required');
  }
  const hasCreatedEnvRef = useRef(false);
  const vmRef = useRef(null);
  const [isMaximized, setIsMaximized] = useState(false);
  const [isCollapsed, setIsCollapsed] = useState(false);
  const [isStuck, setIsStuck] = useState(false);
  const [iframeKey, setIframeKey] = useState(0);
  const [showApiKeyDialog, setShowApiKeyDialog] = useState(false);
  const [apiKey, setApiKey] = useState('');
  const [error, setError] = useState('');
  const [success, setSuccess] = useState(false);
  const [isSubmitting, setIsSubmitting] = useState(false);
  const [isValidating, setIsValidating] = useState(false);
  const [detectedTheme, setDetectedTheme] = useState('dark');
  useEffect(() => {
    if (typeof window === 'undefined') return;
    const checkTheme = () => {
      const isDark = document.documentElement.classList.contains('dark');
      setDetectedTheme(isDark ? 'dark' : 'light');
    };
    checkTheme();
    const observer = new MutationObserver(checkTheme);
    observer.observe(document.documentElement, {
      attributes: true,
      attributeFilter: ['class']
    });
    return () => observer.disconnect();
  }, []);
  const theme = userTheme || detectedTheme;
  const [selectedProvider, setSelectedProvider] = useState(() => {
    if (typeof window === 'undefined') return 'gemini';
    return localStorage.getItem(PROVIDER_STORAGE_KEY) || 'gemini';
  });
  const isApiKeyConfigured = () => {
    const openaiKey = localStorage.getItem(STORAGE_KEY);
    const geminiKey = localStorage.getItem(GEMINI_STORAGE_KEY);
    const anthropicKey = localStorage.getItem(ANTHROPIC_STORAGE_KEY);
    return openaiKey !== null && openaiKey.trim().length > 0 || geminiKey !== null && geminiKey.trim().length > 0 || anthropicKey !== null && anthropicKey.trim().length > 0;
  };
  const dispatchApiKeyChanged = () => {
    if (typeof window !== 'undefined' && window.dispatchEvent) {
      window.dispatchEvent(new CustomEvent('apiKeyChanged', {
        detail: {
          configured: isApiKeyConfigured()
        }
      }));
    }
  };
  const saveApiKey = apiKey => {
    if (apiKey && apiKey.trim()) {
      const trimmedKey = apiKey.trim();
      localStorage.setItem(STORAGE_KEY, trimmedKey);
      dispatchApiKeyChanged();
      return true;
    }
    return false;
  };
  const buildEnvContent = () => {
    const openaiKey = localStorage.getItem(STORAGE_KEY)?.trim();
    const geminiKey = localStorage.getItem(GEMINI_STORAGE_KEY)?.trim();
    const anthropicKey = localStorage.getItem(ANTHROPIC_STORAGE_KEY)?.trim();
    if (!openaiKey && !geminiKey && !anthropicKey) {
      return `OPENAI_MODEL=gpt-4.1-nano
OPENAI_API_KEY=sk-mock-key-1234567890abcdef
GEMINI_MODEL=gemini-2.5-flash-lite
GOOGLE_GENERATIVE_AI_API_KEY=
GOOGLE_API_KEY=
ANTHROPIC_API_KEY=
AI_PROVIDER=openai
# API key not found in browser storage
# To configure your API key:
# 1. For Gemini (free): Go to https://aistudio.google.com/apikey
# 2. For OpenAI: Go to https://platform.openai.com/api-keys
# 3. For Claude: Go to https://console.anthropic.com/settings/keys
# 4. Enter it in the configuration form above this editor
# 5. The .env file will be automatically updated with your key`;
    }
    const envLines = ['# Using the API key(s) you configured. This file will be created when the dialog is loaded.'];
    if (openaiKey) {
      envLines.push(`OPENAI_MODEL=gpt-4.1-nano`);
      envLines.push(`OPENAI_API_KEY=${openaiKey}`);
    }
    if (geminiKey) {
      envLines.push(`GEMINI_MODEL=gemini-2.5-flash-lite`);
      envLines.push(`# Vercel AI SDK uses GOOGLE_GENERATIVE_AI_API_KEY, LangChain uses GOOGLE_API_KEY`);
      envLines.push(`GOOGLE_GENERATIVE_AI_API_KEY=${geminiKey}`);
      envLines.push(`GOOGLE_API_KEY=${geminiKey}`);
    }
    if (anthropicKey) {
      envLines.push(`ANTHROPIC_API_KEY=${anthropicKey}`);
    }
    const provider = anthropicKey ? 'anthropic' : geminiKey ? 'gemini' : 'openai';
    envLines.push(`AI_PROVIDER=${provider}`);
    return envLines.join('\n');
  };
  const updateEnvFile = async vm => {
    if (!vm) return;
    try {
      await vm.applyFsDiff({
        create: {
          'env/.env': buildEnvContent(),
          'env/run.conf': `file=${file}`
        },
        destroy: []
      });
      hasCreatedEnvRef.current = true;
    } catch (error) {
      console.error('Failed to write env files:', error);
      hasCreatedEnvRef.current = false;
    }
  };
  useEffect(() => {
    if (!isApiKeyConfigured()) {
      setShowApiKeyDialog(true);
    }
    const handleApiKeyChanged = () => {
      if (isApiKeyConfigured()) {
        setShowApiKeyDialog(false);
      }
    };
    if (typeof window !== 'undefined') {
      window.addEventListener('apiKeyChanged', handleApiKeyChanged);
      return () => {
        window.removeEventListener('apiKeyChanged', handleApiKeyChanged);
      };
    }
  }, []);
  const validateApiKey = async (key, provider) => {
    try {
      const urls = {
        gemini: 'https://generativelanguage.googleapis.com/v1beta/models?key=' + encodeURIComponent(key.trim()),
        openai: 'https://api.openai.com/v1/models',
        anthropic: 'https://api.anthropic.com/v1/models'
      };
      const headerMap = {
        gemini: {
          'Content-Type': 'application/json'
        },
        openai: {
          'Authorization': `Bearer ${key.trim()}`,
          'Content-Type': 'application/json'
        },
        anthropic: {
          'x-api-key': key.trim(),
          'anthropic-version': '2023-06-01',
          'Content-Type': 'application/json'
        }
      };
      const url = urls[provider];
      const headers = headerMap[provider];
      const response = await fetch(url, {
        method: 'GET',
        headers
      });
      if (response.ok) {
        return {
          valid: true
        };
      } else if (response.status === 401 || response.status === 403) {
        return {
          valid: false,
          error: 'Invalid API key. Please check your key and try again.'
        };
      } else if (response.status === 429) {
        return {
          valid: false,
          error: 'Rate limit exceeded. Please try again later.'
        };
      } else {
        const errorData = await response.json().catch(() => ({}));
        return {
          valid: false,
          error: errorData.error?.message || `API request failed with status ${response.status}`
        };
      }
    } catch (err) {
      if (err.name === 'TypeError' && err.message.includes('fetch')) {
        return {
          valid: false,
          error: 'Network error. Please check your connection and try again.'
        };
      }
      return {
        valid: false,
        error: err.message || 'Failed to validate API key. Please try again.'
      };
    }
  };
  const handleSkipConfiguration = () => {
    const skipKey = 'sk-<configure-your-key>';
    saveApiKey(skipKey);
    setShowApiKeyDialog(false);
  };
  const handleApiKeySubmit = async e => {
    e.preventDefault();
    setError('');
    setSuccess(false);
    setIsSubmitting(true);
    const providerNames = {
      gemini: 'Gemini',
      openai: 'OpenAI',
      anthropic: 'Claude'
    };
    if (!apiKey || !apiKey.trim()) {
      setError(`Please enter your ${providerNames[selectedProvider]} API key`);
      setIsSubmitting(false);
      return;
    }
    const trimmedKey = apiKey.trim();
    if (selectedProvider === 'openai' && !trimmedKey.startsWith('sk-')) {
      setError('Invalid API key format. OpenAI API keys should start with "sk-"');
      setIsSubmitting(false);
      return;
    }
    if (selectedProvider === 'anthropic' && !trimmedKey.startsWith('sk-ant-')) {
      setError('Invalid API key format. Anthropic API keys should start with "sk-ant-"');
      setIsSubmitting(false);
      return;
    }
    setIsValidating(true);
    setError('');
    const validation = await validateApiKey(trimmedKey, selectedProvider);
    setIsValidating(false);
    if (!validation.valid) {
      setError(validation.error || 'Invalid API key. Please check your key and try again.');
      setIsSubmitting(false);
      return;
    }
    try {
      const storageKeys = {
        gemini: GEMINI_STORAGE_KEY,
        openai: STORAGE_KEY,
        anthropic: ANTHROPIC_STORAGE_KEY
      };
      localStorage.setItem(storageKeys[selectedProvider], trimmedKey);
      localStorage.setItem(PROVIDER_STORAGE_KEY, selectedProvider);
      dispatchApiKeyChanged();
      setSuccess(true);
      setApiKey('');
      setTimeout(() => {
        window.location.reload();
      }, 1000);
    } catch (err) {
      setError(err.message || 'Failed to save API key. Please try again.');
      setIsSubmitting(false);
    }
  };
  const baseFilePath = file || 'src/hello_world.ts';
  let filePath = baseFilePath;
  if (typeof lines === 'string' && lines.trim()) {
    const lineParts = lines.split('-');
    if (lineParts.length === 2) {
      filePath = `${filePath}:L${lineParts[0].trim()}-L${lineParts[1].trim()}`;
    } else {
      filePath = `${filePath}:L${lineParts[0].trim()}`;
    }
  } else if (typeof lines === 'object' && lines.start !== undefined) {
    filePath = lines.end !== undefined ? `${filePath}:L${lines.start}-L${lines.end}` : `${filePath}:L${lines.start}`;
  }
  const stackblitzUrl = `https://stackblitz.com/github/${repo}?file=${encodeURIComponent(filePath)}&embed=1&view=editor&theme=${theme}`;
  const loadSDK = () => {
    return new Promise((resolve, reject) => {
      if (window.StackBlitzSDK || window.stackblitzSDK) {
        resolve(window.StackBlitzSDK || window.stackblitzSDK);
        return;
      }
      if (document.querySelector('script[data-stackblitz-sdk]')) {
        const checkInterval = setInterval(() => {
          if (window.StackBlitzSDK || window.stackblitzSDK) {
            clearInterval(checkInterval);
            resolve(window.StackBlitzSDK || window.stackblitzSDK);
          }
        }, 100);
        setTimeout(() => {
          clearInterval(checkInterval);
          reject(new Error('SDK loading timeout'));
        }, 10000);
        return;
      }
      const script = document.createElement('script');
      script.src = 'https://unpkg.com/@stackblitz/sdk/bundles/sdk.umd.js';
      script.async = true;
      script.setAttribute('data-stackblitz-sdk', 'true');
      script.onload = () => {
        const sdk = window.StackBlitzSDK || window.stackblitzSDK;
        if (sdk) {
          resolve(sdk);
        } else {
          reject(new Error('SDK loaded but not available on window'));
        }
      };
      script.onerror = () => {
        reject(new Error('Failed to load StackBlitz SDK'));
      };
      document.head.appendChild(script);
    });
  };
  const LOAD_TIMEOUT_MS = 10000;
  const iframeElRef = useRef(null);
  const reloadCountRef = useRef(0);
  const handleRetry = () => {
    vmRef.current = null;
    hasCreatedEnvRef.current = false;
    reloadCountRef.current = 0;
    setIsStuck(false);
    setIframeKey(prev => prev + 1);
  };
  const iframeRef = iframe => {
    iframeElRef.current = iframe;
  };
  const connectToVM = async iframe => {
    const sdk = await loadSDK();
    return sdk.connect(iframe);
  };
  const handleIframeLoad = async () => {
    const iframe = iframeElRef.current;
    if (!iframe) return;
    if (reloadCountRef.current > 0) {
      try {
        const vm = await connectToVM(iframe);
        vmRef.current = vm;
        await updateEnvFile(vm);
      } catch (_) {}
      return;
    }
    try {
      if (vmRef.current) return;
      const vm = await Promise.race([connectToVM(iframe), new Promise((_, reject) => setTimeout(() => reject(new Error('connect timeout')), LOAD_TIMEOUT_MS))]);
      vmRef.current = vm;
      await updateEnvFile(vm);
    } catch (error) {
      console.error('Failed to connect to StackBlitz VM:', error);
      if (typeof window !== 'undefined' && window.gtag) {
        window.gtag('event', 'load_refresh_error', {
          event_category: 'stackblitz',
          event_label: file,
          error_message: error.message
        });
      }
      reloadCountRef.current = 1;
      setTimeout(() => {
        setIframeKey(prev => prev + 1);
      }, 2000);
    }
  };
  const isSafari = typeof navigator !== 'undefined' && (/^((?!chrome|android).)*safari/i).test(navigator.userAgent);
  if (isSafari) {
    return <div className="code-editor-dialog-container" style={{
      height: height
    }}>
        <div className="code-editor-dialog-box">
          <h2 className="code-editor-dialog-title">
            <svg width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="#f59e0b" strokeWidth="2">
              <path d="M10.29 3.86L1.82 18a2 2 0 0 0 1.71 3h16.94a2 2 0 0 0 1.71-3L13.71 3.86a2 2 0 0 0-3.42 0z"></path>
              <line x1="12" y1="9" x2="12" y2="13"></line>
              <line x1="12" y1="17" x2="12.01" y2="17"></line>
            </svg>
            Browser Not Supported
          </h2>
          <p className="code-editor-dialog-description">
            The interactive code editor is not supported on Safari. Please use <strong>Chrome</strong>, <strong>Edge</strong>, or <strong>Firefox</strong> to run the examples.
          </p>
        </div>
      </div>;
  }
  if (showApiKeyDialog) {
    return <div className="code-editor-dialog-container" style={{
      height: height
    }}>
        <div className="code-editor-dialog-box">
          <h2 className="code-editor-dialog-title">
            <svg width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="#f59e0b" strokeWidth="2">
              <path d="M10.29 3.86L1.82 18a2 2 0 0 0 1.71 3h16.94a2 2 0 0 0 1.71-3L13.71 3.86a2 2 0 0 0-3.42 0z"></path>
              <line x1="12" y1="9" x2="12" y2="13"></line>
              <line x1="12" y1="17" x2="12.01" y2="17"></line>
            </svg>
            Configure API Key
          </h2>

          <p className="code-editor-dialog-description">
            All interactive examples execute entirely within your browser environment, ensuring complete security and privacy.
            Your API key is stored locally in your browser's storage and is never transmitted to external servers.
          </p>

          <div className="llm-provider-tabs" style={{
      marginBottom: '16px'
    }}>
            <button type="button" onClick={() => {
      setSelectedProvider('gemini');
      setError('');
      setApiKey('');
    }} className={`llm-provider-tab ${selectedProvider === 'gemini' ? 'llm-provider-tab-active' : ''}`}>
              Gemini <span className="llm-provider-tab-badge">Free</span>
            </button>
            <button type="button" onClick={() => {
      setSelectedProvider('openai');
      setError('');
      setApiKey('');
    }} className={`llm-provider-tab ${selectedProvider === 'openai' ? 'llm-provider-tab-active' : ''}`}>
              OpenAI
            </button>
            <button type="button" onClick={() => {
      setSelectedProvider('anthropic');
      setError('');
      setApiKey('');
    }} className={`llm-provider-tab ${selectedProvider === 'anthropic' ? 'llm-provider-tab-active' : ''}`}>
              Claude
            </button>
          </div>

          {selectedProvider === 'gemini' && <div className="llm-gemini-recommendation" style={{
      marginBottom: '16px'
    }}>
              Gemini offers a generous free tier — great for learning! Get your free API key at{' '}
              <a href="https://aistudio.google.com/apikey" target="_blank" rel="noopener noreferrer" className="code-editor-link">
                aistudio.google.com/apikey
              </a>
            </div>}

          {selectedProvider === 'openai' && <div className="code-editor-info-box">
              <p className="code-editor-info-box-title">
                Don't have an API key?
              </p>
              <p className="code-editor-info-box-text">
                Get one at{' '}
                <a href="https://platform.openai.com/api-keys" target="_blank" rel="noopener noreferrer" className="code-editor-link">
                  platform.openai.com/api-keys
                </a>
              </p>
            </div>}

          {selectedProvider === 'anthropic' && <div className="code-editor-info-box">
              <p className="code-editor-info-box-title">
                Don't have an API key?
              </p>
              <p className="code-editor-info-box-text">
                Get one at{' '}
                <a href="https://console.anthropic.com/settings/keys" target="_blank" rel="noopener noreferrer" className="code-editor-link">
                  console.anthropic.com/settings/keys
                </a>
              </p>
            </div>}

          <form onSubmit={handleApiKeySubmit}>
            <div className="code-editor-form-group">
              <label htmlFor="api-key-input" className="code-editor-label">
                {selectedProvider === 'gemini' ? 'Gemini' : 'OpenAI'} API Key
              </label>
              <input id="api-key-input" type="password" value={apiKey} onChange={e => {
      setApiKey(e.target.value);
      setError('');
      setSuccess(false);
    }} placeholder={selectedProvider === 'openai' ? 'sk-...' : 'Gemini API Key'} disabled={isSubmitting} className={`code-editor-input ${error ? 'code-editor-input-error' : ''}`} />
            </div>

            {isValidating && <div className="code-editor-message code-editor-message-info">
                <span className="code-editor-message-icon">⏳</span>
                <span>Validating API key...</span>
              </div>}

            {error && !isValidating && <div className="code-editor-message code-editor-message-error">
                <span className="code-editor-message-icon">⚠️</span>
                <span>{error}</span>
              </div>}

            {success && <div className="code-editor-message code-editor-message-success">
                <span className="code-editor-message-icon">✓</span>
                <span>API key saved successfully! Loading editor...</span>
              </div>}

            <button type="submit" disabled={isSubmitting || isValidating || !apiKey.trim()} className="code-editor-button">
              {isValidating ? 'Validating...' : isSubmitting ? 'Saving...' : 'Save API Key'}
            </button>
          </form>

          <button type="button" onClick={handleSkipConfiguration} disabled={isSubmitting || isValidating} className="code-editor-button-secondary">
            Skip Configuration
          </button>

          <div className="code-editor-footer">
            <p className="code-editor-footer-text">
              Alternatively, you may checkout the source code from{' '}
              <a href="https://github.com/ai-tutorial/typescript-examples" target="_blank" rel="noopener noreferrer" className="code-editor-link code-editor-link-break">
                https://github.com/ai-tutorial/typescript-examples
              </a>
              {' '}and run the examples locally.
            </p>
          </div>
        </div>
      </div>;
  }
  const toggleMaximize = () => setIsMaximized(!isMaximized);
  const toggleCollapse = () => setIsCollapsed(!isCollapsed);
  return <div className={`code-editor-wrapper ${isMaximized ? 'maximized' : ''} ${isCollapsed ? 'collapsed' : ''}`} data-theme={theme}>
      <div className="code-editor-header">
        <div className="code-editor-title">
          <svg width="14" height="14" viewBox="0 0 24 24" fill="none" stroke="currentColor" strokeWidth="2" strokeLinecap="round" strokeLinejoin="round">
            <path d="M11 4H4a2 2 0 0 0-2 2v14a2 2 0 0 0 2 2h14a2 2 0 0 0 2-2v-7"></path>
            <path d="M18.5 2.5a2.121 2.121 0 0 1 3 3L12 15l-4 1 1-4 9.5-9.5z"></path>
          </svg>
          {title}
        </div>
        <div className="code-editor-controls">
          {!isMaximized && <button className="code-editor-collapse-button" onClick={toggleCollapse} title={isCollapsed ? "Expand" : "Collapse"} type="button">
              <svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" strokeWidth="2" strokeLinecap="round" strokeLinejoin="round">
                {isCollapsed ? <polyline points="6 9 12 15 18 9" /> : <polyline points="6 15 12 9 18 15" />}
              </svg>
            </button>}
          <button className="code-editor-maximize-button" onClick={toggleMaximize} title={isMaximized ? "Minimize" : "Maximize (Focus Mode)"} type="button">
            <svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" strokeWidth="2" strokeLinecap="round" strokeLinejoin="round">
              {isMaximized ? <><path d="M4 14h6v6" /><path d="M20 10h-6V4" /><path d="M14 10l7-7" /><path d="M3 21l7-7" /></> : <><path d="M15 3h6v6" /><path d="M9 21H3v-6" /><path d="M21 3l-7 7" /><path d="M3 21l7-7" /></>}
            </svg>
          </button>
        </div>
      </div>

      {!isCollapsed && <div style={{
    position: 'relative',
    height: isMaximized ? 'auto' : height,
    flex: isMaximized ? 1 : 'none'
  }}>
          <iframe key={iframeKey} ref={iframeRef} onLoad={handleIframeLoad} src={stackblitzUrl} className="code-editor-iframe" style={{
    height: '100%',
    flex: isMaximized ? 1 : 'none'
  }} title={title || 'Code Example'} allow="accelerometer; camera; encrypted-media; geolocation; gyroscope; hid; microphone; midi; payment; usb; xr-spatial-tracking" sandbox="allow-forms allow-modals allow-popups allow-presentation allow-same-origin allow-scripts" />

          {isStuck && <div className="code-editor-stuck-overlay">
              <div className="code-editor-stuck-box">
                <svg width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="#f59e0b" strokeWidth="2">
                  <path d="M10.29 3.86L1.82 18a2 2 0 0 0 1.71 3h16.94a2 2 0 0 0 1.71-3L13.71 3.86a2 2 0 0 0-3.42 0z"></path>
                  <line x1="12" y1="9" x2="12" y2="13"></line>
                  <line x1="12" y1="17" x2="12.01" y2="17"></line>
                </svg>
                <p>StackBlitz is taking too long to load. This can happen when the repository was recently updated.</p>
                <button type="button" className="code-editor-button" onClick={handleRetry} style={{
    marginTop: '8px'
  }}>
                  Retry
                </button>
              </div>
            </div>}
        </div>}
    </div>;
};

Choosing the right model and optimizing costs can reduce your bill by 10x without sacrificing quality. This page covers model cascading, prompt caching, and the TOON format.

## Model Selection Decision Framework

**The Model Landscape (January 2025):**

| Model             | Context | Cost (input/output per 1M tokens) | Best For                               |
| ----------------- | ------- | --------------------------------- | -------------------------------------- |
| GPT-4 Turbo       | 128K    | \$10 / \$30                       | Complex reasoning, structured output   |
| GPT-3.5 Turbo     | 16K     | \$0.50 / \$1.50                   | Simple tasks, high volume              |
| Claude Sonnet 4.5 | 200K    | \$3 / \$15                        | Long documents, nuanced analysis       |
| Claude Haiku      | 200K    | \$0.25 / \$1.25                   | Fast classification, simple extraction |
| Gemini Pro 1.5    | 2M      | \$1.25 / \$5                      | Massive context, multimodal            |
| Llama 3 70B       | Varies  | Self-hosted                       | On-premise requirements                |

**Decision Tree:**

```
Is the task simple (classification, basic extraction)?
├─ Yes → Use fastest/cheapest (Haiku, GPT-3.5)
└─ No → Continue

Do you need >100K tokens of context?
├─ Yes → Claude Sonnet or Gemini Pro
└─ No → Continue

Do you need structured JSON output?
├─ Yes → GPT-4
└─ No → Claude Sonnet (better prose)

Is cost critical (high volume)?
├─ Yes → Consider model cascading (section 5.3)
└─ No → Use best model for quality
```

As of publication. Verify latest pricing/context on vendor pages: [OpenAI pricing](https://openai.com/api/pricing), [Anthropic pricing](https://www.anthropic.com/pricing), and [Google Gemini pricing/models](https://ai.google.dev/pricing).

## Prompt Caching: 50-90% Cost Reduction

**The Problem:**
You're sending the same 50K token knowledge base with EVERY request.

<CodeGroup>
  ```ts Pseudocode theme={null}
  // Without caching
  for (const query of queries) {  // 10,000 queries
      const prompt = `${knowledgeBase}\n\nQuery: ${query}`;  // 50K + 100 tokens
      const response = await llm.generate(prompt);
  }

  // Cost: 10,000 * 50,100 tokens = 501M input tokens
  // At \$3/1M: \$1,503
  ```
</CodeGroup>

**The Solution: Prompt Caching**

Mark reusable parts of your prompt for caching:

<CodeEditor file="src/prompting/prompt_caching_openai.ts" functionName="main" lines="23-82" title="Prompt Caching: OpenAI" />

<CodeEditor file="src/prompting/prompt_caching_anthropic.ts" functionName="main" lines="32-90" title="Prompt Caching: Anthropic Claude" />

**Production Economics:**

<CodeGroup>
  ```ts Pseudocode theme={null}
  // Scenario: Customer support chatbot
  // - Knowledge base: 50K tokens
  // - Avg conversation: 5 queries
  // - Cache hit rate: 80% (users ask follow-ups quickly)

  without_caching = 10_000 queries * 50K tokens * \$3/1M = \$1,500
  with_caching = (
      (10_000 * 0.2) * 50K   // Cache misses (20%)
      + (10_000 * 0.8) * 5K  // Cache hits (90% reduction)
  ) * \$3/1M = \$450

  savings = \$1,050 (70% reduction)
  ```
</CodeGroup>

**Best Practices:**

1. Cache static content (knowledge bases, system prompts)
2. Don't cache user input (changes every request)
3. Structure prompts with cacheable parts first
4. Monitor cache hit rates
5. Adjust query patterns to maximize cache hits

## Model Cascading: Using Cheap Models First

**The Strategy:**

* Try cheap/fast model first
* If uncertain, escalate to expensive/smart model
* Can reduce cost while maintaining quality when confidence gating is reliable

**Implementation:**

<CodeEditor file="src/prompting/model_cascading.ts" functionName="main" lines="100-115" title="Model Cascading" />

**When Cascading Works:**

* High-volume, similar tasks
* Clear confidence signals (some models provide log probabilities)
* Cost pressure but quality requirements

**When to Avoid:**

* Low latency requirements (cascading adds delay)
* Tasks where confidence is hard to measure
* Low volume (not worth complexity)

**In Production:**

| Factor     | Single model        | Cascading                              |
| ---------- | ------------------- | -------------------------------------- |
| Accuracy   | Stable, predictable | Depends on routing quality             |
| Latency    | Lower (one call)    | Higher (fallback adds calls)           |
| Cost       | Higher per call     | Lower on average if many low-cost wins |
| Complexity | Lower               | Higher (routing, monitoring)           |

Choose cascading when cost pressure is high and confidence signals are trustworthy; otherwise prefer simplicity.

## TOON for Token-Efficient Context

**Why:** For uniform arrays of objects with primitive fields, TOON reduces token usage (often 30-60% vs JSON) and is easy for LLMs to parse.

**When TOON excels:**

* Uniform tabular arrays (same keys, primitive values).
* Large lists where repeated JSON keys dominate cost.

**When to prefer JSON:**

* Mixed/nested structures, varying field sets, or complex types.

**Example (input as TOON):**
[Full runnable TOON notebook](https://colab.research.google.com/drive/15raJmSwjprLRf7BkfuhLU2srvZ88bhcB?usp=drive_link)

```
items[2]{sku,name,qty,price}:
  A1,Widget,2,9.99
  B2,Gadget,1,14.5
```

**Prompting the model to output TOON:**

```
Data is in TOON (2-space indent; arrays show [N]{fields}).
Return ONLY TOON with the same header; set [N] to match rows.
```

**Practical exercise:** Convert your JSON examples to TOON and compare input token counts and task accuracy.

See: [TOON repository](https://github.com/toon-format/toon) and [official site/spec](https://toonformat.dev)

<Quiz>
  <QuizQuestion question="You're processing 10K customer queries/day with the same 2000-token system prompt. What's the single highest-impact cost optimization?" options={["Switch to a smaller model for all queries", "Enable prompt caching — the shared system prompt prefix is processed once and reused across all 10K calls", "Reduce the system prompt to 500 tokens"]} answer={1} explanation="With 10K calls sharing the same prefix, prompt caching saves ~90% of input token costs on that prefix. This is the highest leverage optimization for high-volume, same-prompt workloads." />

  <QuizQuestion question="Your model cascade uses Haiku for simple queries and Opus for complex ones. 80% of queries hit Haiku. But you notice complex queries are sometimes misrouted to Haiku. What's the risk?" options={["No risk — Haiku will just take longer on complex queries", "Haiku gives wrong answers on complex queries, degrading user trust while appearing to save money", "The cascade automatically retries with Opus"]} answer={1} explanation="Misrouting complex queries to a weak model gives confidently wrong answers. The cost savings are illusory if quality drops. Your classifier's accuracy directly determines cascade effectiveness." />
</Quiz>