If we have our website link on a higher pagerank website, that will help in increasing our pagerank too right? What if its the other way around? The higher pagerank site have their link on our lower pagerank site? What are the effects?
Good question!! if higher pr site have their link on lower pagerank site, then higher pr site not get more link juice.
I don't think linking to a higher PR site has any effect on the PR of your own site. However, I DO think that Google gives your site a bit more trust if you're linking to authority sites. (Wikipedia, for example.)