A lamb is a young sheep before it reaches puberty. Mutton is the meat from a lamb, sheep or ram. In the context of a supermarket or restaurant it is implicit that the lamb is slaughtered and only the lamb mutton is being sold to you. But if they just say mutton then it is not specified that it is from a lamb and it can be from a sheep as well.
A fun fact is that just like a lot of English words the term for the livestock comes from Germanic since it was used by Anglo-Saxan farmers but the term for the food comes from French because the Norman nobles spoke French.
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