If a stationary observer sees a ship moving relativistically (near the speed of light), will it appear contracted or enlarged? And by how much.

Einstein's theory of special relativity postulates two theories; firstly the speed of light is a universal constant, and secondly the laws of physics are the same in all inertial (non-accelerating) reference frames. In this question, we have two reference frames; one relativistic and the other stationary. To measure time in these reference frames we use a 'light-clock', in which t is the time taken for light to travel the width of the ship and reflect back off a mirror, is measured. For a stationary observer t=2L/c, where L is the ship width.A stationary observer, looking at the moving ship, will see the light beam travel further than if it were at rest. Hence for an observer, the time increases. Now consider distances - in order to keep the speed of light a constant, for an increase in time the distance must decrease. This 'shrinking' only occurs parallel to the direction of motion and is given by the factor gamma = 1 / sqrt(1-v^2/c^2), which is always greater than 1. Hence a stationary observer sees L' = L/gamma.