Lots of questions.
What are the pixel dimensions of your jpgs? What are you or the program setting as the project preset for this project? If you do not know, please check out Edit Menu/Project Settings/General and the readings for Editing Mode, Timebase, and Frame Size.
Can we assume that you are using Premiere Elements 11 on Windows 7 or 8 64 bit?
Let us start here and then decide the next troubleshooting steps?