The induced emf in a conducting loop moving in a magnetic field is given by Faraday's Law of Induction:
\[
\text{emf} = - \frac{d\Phi}{dt}
\]
Where:
- \( \Phi \) is the magnetic flux,
- \( \frac{d\Phi}{dt} \) is the rate of change of flux.
The magnetic flux is given by:
\[
\Phi = B \cdot A = B \cdot \pi r^2
\]
Here:
- \( B = 0.125 \, \text{T} \) is the magnetic field,
- \( r = 4 \, \text{cm} = 0.04 \, \text{m} \) is the radius of the loop.
Since the radius is shrinking at a rate of \( \frac{dr}{dt} = -2 \, \text{mm/s} = -2 \times 10^{-3} \, \text{m/s} \), we can differentiate the flux:
\[
\frac{d\Phi}{dt} = B \cdot \frac{d}{dt} \left( \pi r^2 \right) = B \cdot 2\pi r \cdot \frac{dr}{dt}
\]
Substitute the values:
\[
\frac{d\Phi}{dt} = 0.125 \cdot 2\pi \cdot 0.04 \cdot (-2 \times 10^{-3})
\]
Simplifying this:
\[
\frac{d\Phi}{dt} = -0.125 \cdot 2\pi \cdot 0.04 \cdot 2 \times 10^{-3} = - 20 \times 10^{-6} \, \text{V} = - 20 \, \mu V
\]
Thus, the induced emf is \( 20 \, \mu V \).