Why does he kill the little person?

No, the little guy was just being a little short with him.

Short people got no reason to live.

gee, i just love u guys.

He didn't have the money to pay for the gun.

Primarily because he needed the gun and the guy selling the gun wasn't going to sell it to him. Eric is a utilitarian. He needed a gun to continue his journey, so he killed the guy. I'm sure he was taking into account that the guy was frequenting a whorehouse that would prostitute teenage boys and that he threw a rock at a dog for barking. It's not like that guy was a pillar of the community.

The reason he killer him was because his dog had just died and that was what he was after the whole time in the movie,the dog in the back of the car. He also shows affection to the woman doctor and her care taking of the dogs people abandoned. Don't disrespect dogs around him!!!

"Gentlemen, you can't fight in here! This is the War Room"~ President Merkin Muffley

First off... Colin threw rocks at the dog. Second, he called Eric a *beep* psycho. Third, he wouldn't give Eric the gun for less (a trade maybe). And forth, Colin said, "It's $300, if you don't have $300 you can *beep* off!" And that was the last straw for Eric as he blows Colin's brains out. You don't mess with a ticking time bomb.

"Ain't life grand!"

Sympathy. He euthanized the miserable, schizophrenic, dog-abusing dwarf.