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This illusion is called the Ames room after its creator, Adelbert Ames, Jr.

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It is a very clever illusion.  You think you are looking at a normal room.

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But instead of a normal rectangular room, the room is made up of trapezoids

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which, among other changes, makes the person on the left a lot farther away from you.

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Since one figure is farther away than it appears, it is smaller on our retina.

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We do not activate our depth perception properly and so see the person as smaller than he is.

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This is the opposite of the Müller-Lyer illusion.

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It is a similar illusion to that used to create the different sizes of Hobbits in The Lord of the Rings movies.

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When Frodo rides in the cart with Gandalf at the beginning of The Fellowship of the Ring movie

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Elijah Wood is actually sitting several feet behind Ian McKellen.

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But the angle of the camera does not let you see the difference making Elijah Wood look hobbit sized.