informer wrote:
Why does the sun appear to be bigger at sunrise and sunset than at
midday?
Same question also applies to the moon?

Curvature of the Earth's atmosphere.
The atmosphere can bend light, like drops of water
There are other variables here as well, like the thickness of the air

The thicker the air, the more it's bent

Example:

sun on the horizon
the light from the bottom part of the sun is travelling through more
air than the top part. The air bends the light up towards the top half,
giving the sun a squashed appearance

a setting sun looks normal horizontally but becomes more vertically
challenged.

The sun can also appears different colours at sunrise and sunset, hence
the sometimes striking photographs we can get. The effect is amplified
when there's more stuff in the air. After volcanic eruptions, there can
be some very striking sunrises and sunsets

The Moon appears about two to three times larger when on the horizon
compared with overhead

In the case of the Moon Illusion no-one knows excatly.
positively it's known to be an illusion, because of the way our brains
interpret images. It's a question for psychologists rather than weather
science.

Some of the factors involved.
imagine looking at a crowded street scene. the people standing near you
appear to be larger than people further away, but we don't view the
more distant people as being much smaller in size. An effect known as
Size Constancy.

Now look up 'Ponzo Illusion' on the net - which desribes a very common
perspective effect, that can trick our brains

The shape of the sky makes the brain perceive the Moon as being farther
away on the horizon than when it's overhead.
The Ponzo Illusion demonstrates that when you have two objects of same
physical size but at different distances, the brain interprets the more
distant object as being bigger.
Our brains interpret the moon as being bigger when it's on the horizon

Also an internet search engine will give you more info

eg:
http://digbig.com/4chxg

I picked up this useful information from a book:
Bad Astronomy by Philip Plait

He's a professional astronomer

Also tackles questions such as:

Why does the sky appear blue?
Does the sun really give off a yellow colour?