Sure, but don't you think it's an odd statement to say "there is no short book in my bag"? "I don't have short books" or "There are no short books on my bookshelf" would make sense.
Let's visualize a bizarre scenario where you happen to be a portable bookstore and carry many books on you on the go. A customer comes and asks whether you have any short bookS for sale (note the emphasized 'S'), you'd respond: "There are no short books in my bag", and perhaps carry on by saying "I only sell long books". Neither in question, nor in response does mentioning "having a short book in one's bag" make any sense.
Just thought I'd clear that out in case you weren't sure where many of the concerns are coming from.
Of course it's not the most obvious thing to say in English, but the point of this exercise is simply to teach us a certain Arabic pattern for sentences like this one. It must be done using limited vocabulary and grammar introduced up to this point, and there is no need for us to split hairs and overcomplicate things at this stage. We're really not expected to labor on subtleties of the translation now.
This sentence is meant to introduce three new words (a bag, a book, short) reinforcing some grammatical patterns we know (ليس ... في , possessive ي) and adding new grammar item هناك . And I think it does its job just fine.