What is the name of the contagious skin disease characterized by itching and small raised red spots caused by the itch mite?

The condition characterized by itching and the presence of small raised red spots due to an infestation of the itch mite is known as scabies. This skin disease occurs when the microscopic mite burrows into the skin, leading to intense itching and irritation. The symptoms arise from the body’s allergic reaction to the mites and their waste products.

In contrast, other conditions listed in the options have different causes and symptoms. For instance, ringworm is a fungal infection that produces a ring-shaped rash but is not caused by an insect. Psoriasis is an autoimmune condition that results in thick, red patches of skin covered with silvery scales, and eczema is a condition that leads to inflamed, itchy, and dry skin. These distinctions are crucial in understanding different skin diseases and their specific characteristics. Thus, scabies is the correct answer as it specifically refers to an infestation by the itch mite.