So I know some (if not all) major Hyper-visors are capable of scheduling more CPU time for more needy guests, while throttling down the CPU time of idle ones.
How does the Hypervisor know if a guest is spending it’s time idling?
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Start with: what does a normal computer do? When it’s idle, it sends idle instructions to the CPU, and the CPU turns itself off for a bit. (This is a dramatic over-simplification, but accurate enough for this question.)
Some thing happens in a VM: the Hypervisor intercepts the idle instruction if another VM has instructions pending, otherwise it idles the processor itself.