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When magnesium reacts with oxygen to form magnesium oxide, a combination reaction occurs. In a combination reaction, two or more reactants combine to form a single product. In this case, magnesium (Mg) and oxygen (O2) combine to form magnesium oxide (MgO).

This type of reaction is characterized by the formation of a compound from individual elements or simpler compounds. The process involves the transfer of electrons from magnesium to oxygen, resulting in the formation of ionic bonds in magnesium oxide. Understanding this helps to recognize how elements react to form compounds, which is crucial in chemistry.

The other types of reactions listed have distinct characteristics: decomposition reactions involve a single compound breaking down into two or more simpler substances; single displacement reactions occur when one element replaces another in a compound; and double displacement reactions involve the exchange of ions between two compounds. Since none of these scenarios apply to the reaction between magnesium and oxygen, combination is the accurate classification.