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Question: Say alcohol is strictly illegal in your dorm and any student caught supplying or drinking it faces automatic expulsion from school. As you might expect, some students will not be deterred by the threat. It is, however, more likely that those choosing alcohol will be more likely to consume it in the form of bourbon than beer. Explain why. (Assume that although beer is bulkier and has a lower concentration of alcohol than bourbon, the probability of being caught is the same for both.)

Microeconomics, Economics

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