Imagine yourself outside looking up at an airplane high in the sky.  You lift up your hand and see that the plane is smaller than your finger, yet you still know that the plane is large enough to hold hundreds of people. Due to the information in your memory stores, you are still able to perceive the actual size of the airplane despite a change in the size of the retinal image.  This concept is known as size constancy.  
     Despite the fact that you know images that are far away are actually the same size as if they were closer, your brain can be fooled.  An example of this is the moon illusion, in which the moon on the horizon appears larger than one higher in the sky. The moon doesn't actually changes size, but it's relationship to the horizon can make it seem larger lower in the sky.  This phenomenon can also be explained using the figure below.  The center circles are actually both the same size, yet they appear to different because of their relationship to the surrounding circles.  Our brain perceives the circle surrounded by larger circles as smaller, because it is smaller in relation to the surrounding circles.  The opposite is true for the circle surrounded by smaller circles.