I think 'dwarf' in dwarf lopped means that the ears are small not the actual rabbit because I had a French Dwarf Lop and she was HUGE! An English Lopped Rabbit has ears that brush across the floor...
Ears help rabbits to hear, of course! (But if it is arctic hare, even though it may hear better, it does not keep warmth inside.) Rabbits also use their ears to communicate with. They can move them...