Good evening and thanks for your question.
Three things come to mind right off: ringworm, staph and demodectic mange.
While circular areas of hairloss are common with all, we usually see some patchy hairloss on the face, ears and trunk of the body with demodex where ringworm can occur anywhere but often is a result of direct transmission. Sometimes puppies will also battle staph infections and the abdomen and chest are common places for it to occur.
The easiest way to determine what it is is to have your vet do a skin scrape. This will tell him if there are any mites. If there are, he may treat with topical or oral medication such as goodwinol ointment and/or ivermectin. If not, he may wish to go with a topical or oral regimen of antibiotics to help Olivia overcome the suspect bacterial infection. If there is a history of ringworm exposure, this heightens the risk of Olivia potentially having ringworm. We see this more in young kittens, but if Olivia came from a rescue or shelter the risk is a little higher than through a private breeder where the pups may have had no known exposure. Some vets will do a fungal culture to see what grows on the medium and start the pet on a regimen of baths (such as lime sulfur dips) and/or antifungals (grisofulvin is a common choice).
There's no one treatment that will work for Olivia's situation, so she would need to visit a veterinary office to determine the issue. Of the three things mentioned, you and your family would be more likely to acquire ringworm from her, less likely to acquire a staph infection and since demodex is not contagious you wouldn't acquire this from her (many people hear mange and think they're going to get it too, which is not the case with demodex).
Some more info:
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