Now find the Gradient Tool on the Tool Menu. You want to go from transparent to color. Select a circular, vertical, or horizontal gradient. Drag into the area you want blurry. Release the mouse.
Circular gradient blurs everything in a receding circle.
This is a wonderful technique that has many applications in addition to its use as a Selective Focus Gradient Tool. In the real world of commercial photography fog is often a desired element. That's why they make fog machines. In addition, some landscapes can be enhanced by adding fog, overall or just in spots. As we see further away the fog becomes denser.