The Scripture uses narration when conveying the details of a biblical account. Dialogue can be seen when two or more characters are having a conversation. In English, dialogue is enclosed in quotation marks. Narrative exposition is the insertion of background information within a story or narrative. This information can be about the setting, characters' backstories, prior plot events, historical context, etc.
For proper understanding, it is important to recognize exposition when used in the Scriptures. It is sometimes easy to identify and sometimes not as clear. Here are some easily recognized examples:
They raised over him a great heap of stones that stands to this day, and the LORD turned from the fierceness of His anger. Therefore, the name of that place has been called the valley of Achor to this day.
2 Samuel 18:18
Now Absalom in his lifetime had taken and set up for himself a pillar which is in the King's Valley, for he said, "I have no son to preserve my name." So he named the pillar after his own name, and it is called Absalom's Monument to this day.
When evening came, they brought to Him many who were demon-possessed; and He cast out the spirits with a word, and healed all who were ill.
This was to fulfill what was spoken through Isaiah the prophet: "HE HIMSELF TOOK OUR INFIRMITIES AND CARRIED AWAY OUR DISEASES."
Capitalizing in the NASB indicates a quotation from the Old Testament.
And He said to them, "Are you so lacking in understanding also? Do you not understand that whatever goes into the man from outside cannot defile him,
because it does not go into his heart, but into his stomach, and is eliminated?" (Thus He declared all foods clean.) And He was saying, "That which proceeds out of the man, that is what defiles the man.
Most scholars believe the Gospel of Mark was written between 65-75 AD, some 35-40 years after this incident took place.
The NASB and ESV correctly put these last words in parenthesis. Jesus at the time was fulfilling the Mosaic Law. All foods were not clean at the time he said this, and Jesus never ate anything unclean. However, by the time Mark wrote this gospel, Jesus had already died, was raised from the dead, and ascended into heaven. The new covenant had now commenced, and with it, these dietary restrictions were lifted. Here, Mark is indicating through exposition that now, in the time he is writing, by Jesus’ own words, all food is clean.
Exposition in the Gospel of John:
There are different opinions as to when the Gospel of John was written, possibly as early as 75AD and as late as 100AD. When John wrote the gospel, he was most likely living in Asia Minor. He was not in a Jewish, Hebrew/Aramaic speaking community, but he was in a Greek speaking culture (perhaps.in Ephesus) writing about events that had taken place over 45-70 years before. When John wrote, Jesus had already fulfilled all that is recorded: he died, rose from the dead, and was currently seated at the right hand of God in the heavens. It is in this context that John is written, and there are many examples of exposition.
John 20:26-31 The chapter ends with the purpose of the Gospel of John and with narrative exposition.
John 1:41, 42
The Jews then said, "It took forty-six years to build this temple, and will You raise it up in three days?" But He was speaking of the temple of His body. So when He was raised from the dead, His disciples remembered that He said this; and they believed the Scripture and the word which Jesus had spoken.
This popular section of John, in most all red-letter edition Bibles, is entirely in red, meaning it would be all dialogue–-Jesus’ words. However, red letters and quotation marks were not part of the original text. Understanding narrative exposition, we can see what Jesus said (dialogue) and what is actually exposition from the vantage point of John, who is writing some 50 years later.
John 3:1-13 Jesus did not speak the words recorded in John 3:13 or any of the words from verse 13 to the end of the chapter. Jesus did not say he was in heaven while he was in Jerusalem speaking to Nicodemus. Jesus stops speaking at the end of verse 12, and that is where the red letters in the red-letter Bibles should also stop. Verse 13 is part of the narrative of the Gospel of John, not Jesus speaking.