How CPU usage is calculated ?
1.Assume if the CPU speed is 1KHz then it will executes 1000 cycles/second [/read 1000 bits per second]
   
  If we are doing program which requires 500 cycles/ second means then CPU usage is 50%. Rest of the 50 % can be used for other
process or program.
 
  if the program is more intensive and takes 1000 cycles/second to execute, then no more process can run that time. So CPU is so busy in executing the program.
For any external event/program it will respond slowly.

 Normally CPU speed is measured in GHz nowadays.

1KHz = 1000 Hz
1MHz = 1000 KHz
1GHz = 1000 MHz