Locke chooses the wrong item, Richard Alpert disappointed

When Richard Alpert shows up at Locke's home, he sits him down and pulls some items out of a bag. They include:

• a baseball glove
• Book of Laws (the Torah)
  
• a container of granules (maybe sand)
• a compass
• a Mystery Tales comic book (one of the stories is, "What was the secret of the mysterious "Hidden Land!"")
• a knife

Alpert asks John, "Which one of these things belong to you already?" After picking up the compass and the container of granules, then he briefly looks at the Book of Laws and Richard looks hopeful. He then chooses the knife though. Richard looks incredibly disappointed and quickly packs up the items and leaves.

Was the Book of Laws the right choice? Also, what was the point of this exercise? Was it to see if John was prepared for his destiny?