We want a circle that has center (-1,4) and just skims y=2. We can find the equation of the circle knowing its center and its radius. Knowing that it skims y=2 the radius=4-2=2 (Do you know why? Think visually). Then, the standard form of a circle is given by (x-h)^2+(y-k)^2=r^2 where (h,k) is the center and r is the radius. So the equation is (x+1)^2+(y-4)^2=4