Concept:
A circle passing through \( (0,0) \) and \( (0,1) \) must have its center on the perpendicular bisector of the segment joining these points, which is the line \( y = 1/2 \). Let the center be \( (h, 1/2) \). The radius \( r \) will be the distance from the center to \( (0,0) \).
Step 1: Define the radius squared.
\[ r^2 = h^2 + (1/2)^2 = h^2 + 1/4 \]
Step 2: Use the condition of touching circles.
The circle touches \( x^2 + y^2 = 4^2 \) (radius 4, center (0,0)).
If they touch internally, the distance between centers is
\( |4 - r| \).
Distance between \( (0,0) \) and \( (h, 1/2) \) is \( \sqrt{h^2 + 1/4} \),
which is just \( r \).
So, \( r = |4 - r| \).
Case 1: \( r = 4 - r \Rightarrow 2r = 4 \Rightarrow r = 2 \).