Probably to the layman any Jedi they encounter is probably a master unless they have been introduced as a padawan.
Let's see... what facts do we know...
-One must be a master in order to sit on the council.
-One must be given the rank of master by the Jedi Council to be considered a master inside the order.
-Jedi Knights can be given padawans
-A Knight is given the rank of master upon training a padawan to knight
-Common citizens outside the order refer to Jedi as Masters regardless of their actual rank within the order