What version of Premiere Elements and what computer operating system is involved.
Please supply more information. In the meanwhile, I am guessing that you are using the Premiere Elements Narration Tool and should be going to Edit Menu/Preferences/Audio Hardware and clicking on the ASIO button. When you do, you should see a tab for Input and a tab for Output. Under the Input Tab, make sure you have a check mark next to your Microphone.
If you got the following message, the above appears to be what you seek.
If the above does not apply to your situation, then please give more details including microphone in use (USB or type that plugs into computer jack).