The Photomerge Compose feature enables you to replace portions of an image. For example, can select a person from one photo and add the selection to another photograph. You need two images - a source and a destination. You can select an area, crop it from the source image, and then paste it into the destination image, and then adjust it for proportionality and color for the most natural outcome.
The functionality and interface of this feature have been enhanced in Photoshop Elements 14. The corresponding article for Photoshop Elements 14 and later is available at this link.
The portion selected in the previous step is pasted on the image that you want to move the selection to. Use the mouse to move the selection around, and drag the coach marks to resize it to ensure that the pasted content is in proportion with the rest of the photo.
Note: You can also hide/reveal portions of the selection using the available brushes.