Why is Act 1 called the exposition? Explain the background information given on Theseus/Hippolyta, the four lovers, and the workmen.
Act 1 is basically called the exposition because it establishes the setting for the play and provides background information about the principal characters. The exposition also gives us a historical, political, or social context for a play.
In A Midsummer Night's Dream, the first act introduces us to the chief characters. They are Theseus (the Duke of Athens), his intended wife, Hippolyta, the four lovers, and the workmen. In Act 1 Scene 1, Shakespeare sets up the main conflict of the play: Hermia is betrothed to Demetrius but is enamored with Lysander; she wants to marry Lysander, but her father steadfastly refuses to give his consent. The rest of the play addresses this conflict. Basically, Act 1 lays the foundation for the plot twists in Acts 2, 3, 4, and 5.
In Act 1, scene 1, Egeus, Hermia's father, wants her to marry Demetrius, and he gets Theseus to take his side in the argument. For his part, Theseus threatens Hermia with either death or consignment to a nunnery if she refuses to obey her father. Meanwhile, Helena pines for Demetrius and envies Lysander and Hermia's passionate devotion to each other. While Lysander and Hermia plot to marry in secret, Helena also plots to win back Demetrius. In Act 1, Theseus's edict that Hermia obey her father sets in motion the events of the play, from Hermia and Lysander's elopement to the mix-up in identities in Oberon and Titania's enchanted forest.
Act 1, scene 2 introduces us to the workmen who will perform for Theseus and Hippolyta at their wedding. We see the laborers again in Act 5, when they perform Pyramus and Thisbe for the wedding party. Act 1 highlights the contentions that mar the laborers' preparations for the performance. It also lets us know how each laborer is chosen for his part. So, when each workman takes up his role in Act 5, we are already familiar with how he will execute his role. In Act 1, scene 2, Bottom argues that he should be given either the part of Thisbe or the lion. He fancies himself capable of those roles. Instead, Quince assigns Bottom the part of Pyramus.
Act 1, scene 2 also highlights the inept characters of the workmen, and we see evidence of their incompetence when they perform an awkward version of Pyramus and Thisbe for Theseus and Hippolyta in Act 5. Basically, the workmen provide comic relief in the play, with Bottom providing the lion's share of it (especially in Act 3, scene 1 when Puck transforms Bottom's head into an ass's head). Essentially, Act 1 introduces us to the major comic characters of the play: the workmen.