The 'moon illusion' is the phenomenon in which the full moon looks bigger when it is close to the horizon than it does when overhead. It's an illusion because the moon's angular diameter as measured by instruments is no bigger when it's near the horizon.
Here are some pages describing how it occurs:
My general problem with the whole question is that it's beyond astronomy/physics illumination. Astronomy can only go as far as a statement of the form "the moon seems bigger on the horizon, but its physical appearance isn't any bigger in terms of angular diameter." It's an optical illusion in the same way as the "which line is bigger?" drawings on Donald's page (above), and thus essentially the domain of psychology to answer.
Having said that, here are a couple of pictures to illuminate some interesting things about the way we perceive size:
| |
| The sheep is the same size, the background is zoomed in to double its original size. To my eye, this makes the sheep seem smaller; watching the camera zoom in makes us expect an object of given size to appear bigger, and when it doesn't, we infer that it has become smaller. | Background stays the same, the sheep doubles in size. To my eye, the sheep appears to be changing its distance from the viewer. This idea came from the Doctor Who story arc "Robot", featuring a humanoid robot that could change its size. The director commented that initially, when the robot grew in size, it simply looked as if it was coming towards the camera. |