How to resize a layer or picture

I am brand new to anything PhotoShop. I have created a talk balloon that I plan on putting it on a photo. I have the text on it already. However, the area outside of the balloon must be tranparent. I made it transparent pixel by pixel. There must be an easier way. So my two questions are:
1. How to make an area of a picture or layer transparent?
2. How to resize a layer or .jpg picture or any picture that can be edited by PS Elements 12
Tried to include the talk balloon file but it failed because of the content. What is wrong with " Hmmmmmm"
"I think this one fits". It is a psd file.
Bill

1. How to make an area of a picture or layer transparent?
Select the area where you want  it to be transparent and use the Eraser of various types from the tool bar. there are essentially three types:  Eraser Tool, Magic Eraser and Background Eraser.  The selection tool has also many types.
How to resize a layer or .jpg picture or any picture that can be edited by PS Elements 12
To resize any picture you simply go to:
Image >> Resize
Select what ever you want to resize the canvas or the Image.  If you are in PSD file then canvas resize might be appropriate but my answer is pretty general to give you the necessary options.  there is also the "Scale" of the image so you are spoilt for choices here.
You just need to be careful not to0 degrade the image so much by resizing because pixels per inch changes and lower the amount per inch degrades the image;  This is what happens when you increase the size while reverse is the case if you resize it downwards.

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