Nyssa says that a machine in the ship increases density in order to reduce matter. However, if the density of an object is increased it is its volume, not its mass, that is reduced. In simpler terms, the object would still contain the same amount of matter, but its molecules would merely be "tighter packed" together.
The Doctor hands Tegan a notebook (roughly A5 sized) from his pocket so that she can draw a picture of typical Earth fashions for the Urbankans. However, her finished drawing is on paper far larger than a page from the notebook. Not to mention far too detailed and skillfully drawn in such a short space of time.
As Monarch arrives to inspect the TARDIS, a studio technician is crouching directly opposite the Doctor's Ship.