I was gifted a Sony alpha a77 by my wife and it came with the 16-50mm lens and it focus automatically but does it zooms automatically and if it does how do I change the settings to make it zoom automatically?

No, the camera will not zoom automatically. You have to twist on the telephoto ring on the lens. It should be a rubber grip that dominates the most space of the lens. There should be markings showing 16mm-50mm. Twist towards 50 to zoom in, and towards 16 to zoom out.

Be careful not to twist on the focus ring when in auto focus mode... The focus ring is at the front of the lens and you should notice it automatically turning when pointing the camera.

That is an awesome camera. It's not a point and shoot where you simply press a button to zoom. Be sure to take time and read the owners manual and any other helpful materials. I recommend getting a copy of "dSLRs and Photography for Dummies." I read that book and learned more from it than my digital photo class in college. Welcome to the world of hobbyist/professional photographers. :-)