Let A consist of all 8 subsets of the set $\{1, 2, 3\}$, that is
A = $\{ \phi , \{1\}, \{2\}, \{3\}, ...\}$
The relation $R$ on $A$ is defined by:
$aRb$ iff some element of $a$ is larger than some element of $b$.
My question is, is $(\phi,\{1\})$ an element of $R$?
My answer is no, because there simply is no element of $\phi$. Similarly, $(\{1\}, \phi)$ is not in $R$. Is my thinking correct?
You are correct. This is a fundamental idea about the empty set that always deserves a stop and check.
So is there an element of $\emptyset$ that is larger than an element of $\{1\}$? As you say, no.
By contrast, if the rule had been
then $(\emptyset,\{1\})\in R$ vacuously true because there isn't an element of $\emptyset$ that is a counterexample to the definition.