This is part one of Act II of the play. Willy has gone to see Howard, his boss, to ask for a non-traveling job. Willy has lost touch with the changes of the time. He has been trying to approach clients in the old way, failing to understand that things are moving at a faster pace. The incident with the recording highlights this truth about Willy. Howard has been playing around with it the whole time Willy is there, fascinated and excited about the new device. However, when Willy accidentally presses the button, he is fearful of it. Willy shouts for Howard to "Shut it off! Shut it off!"
The incorrect identification of the state capital of Ohio is deliberate. It is Howard's son that is reciting the capitals. Howard is a young man, which puts him in contrast to Willy. To enhance this contrast, we are to understand that Howard's kids are young, too - unlike Willy's sons. The mistake of "Cincinnati" is a typical mistake for a school boy.