Our 3 year old is asking a lot of questions, too.
We've taken the approach of honesty with the appropriate amount of details. So, when he asks why someone is in a wheelchair, we say that is how they move around because their legs don't work like ours do. When he asks if Mommy's pregnant because I have a big belly (I'm really not that out of shape), we appreciate the honestly and get on the treadmill.
He was 1 day shy of his second birthday when I was diagnosed with cancer. We chose at that point to be completely honest and not sugar coat things. They went to chemo sessions, they heard conversations with the Oncologist - they knew Mommy was sick but didn't need to know how sick (our daughter was only a few months old at the time).
For the question he asked, I'd say that Mommy chickens lay eggs that baby chickens grow out of. You don't need to explain the process, but it is the truth. He knows there are baby animals, and baby people. You can just correlate the eggs to the same thing and that the chicks will grow up to be Mommy or Daddy chickens.
Good luck!
The one that stumped me recently was "Mommy, why does that man wear earrings?" He was a biker in full Harley Davidson apparel. I never came up with a good answer for that one.