Is this grammar LALR(1)
A simpler way to see that this grammar is not LALR(1) is to look at the LR(1) item sets:


$S' \rightarrow \bullet A,\enspace \$$
$A \rightarrow \bullet aBb,\enspace \$$
$S' \rightarrow A\bullet ,\enspace \$$
$A \rightarrow a\bullet Bb,\enspace \$$
$B \rightarrow \bullet b,\enspace b$
$B \rightarrow \bullet ,\enspace b$  
$A \rightarrow aB\bullet b,\enspace \$$
$B \rightarrow b\bullet ,\enspace b$
$A \rightarrow aBb\bullet ,\enspace \$$


You can see that in state 3 the shift/reduce conflict remains, even in LR(1). This grammar is not LR(1), and thus not LALR(1).