These words differ from the versions I have heard . . too late tonight for me to go and check my Child Ballads, probably someone else will answer before I manage!
.... but the whole point of this type of conversation is to have a clever answer for each question that turns the task back on to auld hornie; if the child could not give an answer, stand up to auld nick, then he (the child) would be lost!

Similar type of Q & A in ballads where a man (who may or may not be 'himsel' is trying to persuade a woman into bed -- - but she is cleverer than him, sets him impossible tasks in return and so retains her virginity (unless in the end she chooses to let him win-- is that the blacksmith one?!)