I remember that the question in your title was busted in Mythbusters episode 72.
A simple google search also gives many other examples.
As for single- vs alternate-direction folding, I'm guessing that the latter would allow for more folds. It is the thickness vs length along a fold that basically tells you if a fold is possible, since there is always going to be a curvature to the fold. Alternate-direction folding uses both flat directions of the paper, so you run out of length slightly slower. This would be a small effect since you have the linear decrease in length vs the exponential increase in thickness.
Thanks to gerry for the key word (given in a comment above). I can now make my above guess more concrete. The limit on the number of folds (for a given length) does follow from the necessary curvature on the fold. The type of image you see for this makes it clear what's going on
![Fold diagram](https://i.stack.imgur.com/eOIWA.jpg)
For a piece of paper with thickness $t$, the length $L$ needed to make $n$ folds is (OEIS)
$$ L/t = \frac{\pi}6 (2^n+4)(2^n-1) \,.$$
This formula was originally derived by (the then Junior high school student) Britney Gallivan in 2001. I find it amazing that it was not known before that time... (and full credit to Britney).
For alternate folding of a square piece of paper, the corresponding formula is
$$ L/t = \pi 2^{3(n-1)/2} \,.$$
Both formulae give $L=t\,\pi$ as the minimum length required for a single fold. This is because, assuming the paper does not stretch and the inside of the fold is perfectly flat, a single fold uses up the length of a semicircle with outside diameter equal to the thickness of the paper. So if $L < t\,\pi$ then you don't have enough paper to go around the fold.
Let's ignore a lot of the subtleties of the linear folding problem and say that each time you fold the paper you halve its length and double its thickness:
$ L_i = \tfrac12 L_{i-1} = 2^{-i}L_0 $ and $ t_i = 2 t_{i-1} = 2^{i} t_0 $,
where $L=L_0$ and $t=t_0$ are the original length and thickness respectively.
On the final fold (to make it n folds) you need
$L_{n-1} \leq \pi t_{n-1}$ which implies $L \leq \frac14\pi\,2^{2n} t$.
Qualitatively this reproduce the linear folding result given above.
The difference comes from the fact you lose slightly over half of the length on each fold.
These formulae can be inverted and plotted to give the logarithmic graphs
![Number of folds given a length](https://i.stack.imgur.com/hY8bk.png)
where $L$ is measured in units of $t$. The linear folding is shown in red and the alternate direction folding is given in blue. The boxed area is shown in the inset graphic and details the point where alternate folding permanently gains an extra fold over linear folding.
You can see that there exist certain length ranges where you get more folds with alternate than linear folding. After $L/t = 64\pi \approx 201$ you always get one or more extra folds with alternate compared to linear. You can find similar numbers for two or more extra folds, etc...
Looking back on this answer, I really think that I should ditch my theorist tendencies and put some approximate numbers in here. Let's assume that the 8 alternating fold limit for a "normal" piece of paper is correct. Normal office paper is approximately 0.1mm thick. This means that a normal piece of paper must be
$$ L \approx \pi\,(0.1\text{mm}) 2^{3\times 7/2} \approx 0.3 \times 2^{10.5}\,\text{mm}
\approx .3 \times 1000 \, \text{mm} = 300 \text{mm} \,.
$$
Luckily this matches the normal size of office paper, e.g. A4 is 210mm * 297mm.
The last range where you get the same number of folds for linear and alternate folding is $L/t \in (50\pi,64\pi) \approx (157,201)$,
where both methods yield 4 folds. For a square piece of paper 0.1mm thick, this corresponds to 15cm and 20cm squares respectively. With less giving only three folds for linear and more giving five folds for alternating. Some simple experiments show that this is approximately correct.
Well, I think that whatever distortion of the magnetic field is caused by paramagnetic materials - such as aluminum - is also caused, with the opposite sign, by diamagnetic materials - such as bismuth (whose effect should be almost exactly opposite to that of aluminum).
I am convinced you may neglect all those materials. Only paramagnetic materials and various steels and similar metals etc. are relevant. See the relative permeability in this table
http://en.wikipedia.org/wiki/Magnetic_permeability#Values_for_some_common_materials
and just ignore all the materials whose $\mu/\mu_0$ is very close to one, on either side. The only materials that have the opposite but comparably important effects as ferromagnetic materials are superconductors whose $\mu$ vanishes. ;-)
Ferromagnets may sustain their field even if the external source disappears: this is probably the biggest source of interference. However, as you point out, even materials without any permanent field could potentially influence the field that you measure by the mobile device.
Best Answer
Paper, especially when freshly cut, might appear to have smooth edges, but in reality, its edges are serrated (i.e. having a jagged edge), making it more like a saw than a smooth blade. This enables the paper to tear through the skin fairly easily. The jagged edges greatly reduce contact area, and causes the pressure applied to be rather high. Thus, the skin can be easily punctured, and as the paper moves in a transverse direction, the jagged edge will tear the skin open.
Paper may bend easily, but it's very resistant to lateral compression (along its surface). Try squeezing a few sheets of paper in a direction parallel to its surface (preferably by placing them flat on a table and attempting to "compress" it laterally), and you will see what I mean. This is analogous to cutting skin with a metal saw versus a rubber one. The paper is more like a metal one in this case. Paper is rather stiff in short lengths, such as a single piece of paper jutting out from a stack (which is what causes cuts a lot of the time). Most of the time, holding a single large piece of paper and pressing it against your skin won't do much more than bend the paper, but holding it such that only a small length is exposed will make it much harder to bend. The normal force from your skin and the downward force form what is known as a torque couple. There is a certain threshold torque before the paper gives way and bends instead. A shorter length of paper will have a shorter lever arm, which greatly increases the tolerance of the misalignment of the two forces. Holding the paper at a longer length away decreases this threshold (i.e. you have to press down much more precisely over the contact point for the paper to not bend). This is also an important factor in determining whether the paper presses into your skin or simply bends.
Paper is made of cellulose short fibers/pulp, which are attached to each other through hydrogen bonding and possibly a finishing layer. When paper is bent or folded, fibers at the folding line separate and detach, making the paper much weaker. Even if we unfold the folded paper, those detached fibers do not re-attach to each other as before, so the folding line remains as a mechanically weak region and decreasing its stiffness. This is why freshly made, unfolded paper is also more likely to cause cuts.
Lastly, whether a piece of paper cuts skin easily, of course depends on its stiffness. This is why office paper is much more likely to cut you than toilet paper. The paper's density (mass per unit area), also known as grammage, has a direct influence on its stiffness.