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I think I have figured out the problem. I get the medium resolution file when I xfer photos from my iPhone 5 to my MacBook Air, iOS 8 to Yosemite, using the app to app xfer technique. Using the app to app xfer, I see no option to select the resolution. Assuming that the above statement from Enrique on default image size settings is correct, the computer app should automatically download the highest or original resolution of the file from the iPhone app. However, this is not happening.

To double check, I thought I would try using the iPhone app to web browser download technique. When I did this, under each photo selected for download was the option to download a medium resolution image or a full resolution image. HOWEVER, when I selected full resolution, I got an image that was 852x640 pixels. That's the medium resolution size. BUT when I selected medium resolution, I got an image that was 1136x852 pixels. That is the full resolution size.

SO I think there is some conflict on parameter language between Apple iOS8 and the Photo Transfer App. When the Photo Transfer App specifies full sized image (either by user choice or default setting) the download results in the medium size image. And vice versa.