SHARED HOSTING ---> is very similar to living in an Apartment Complex. All residents are in the same location and must share the available resources with everyone. These may include such things as the pool, parking lot, and playground. In shared hosting, all accounts must share the available resources with all the other accounts on the server. These include CPU time, memory, and disk space.
VPS Hosting ---> similar to owning a Condo. While you still share things on the property, you are ultimately responsible for maintaining your own property and repairs inside the condo. There is also significantly fewer residents per building and assigned parking. On a Virtual Private Server, you are allotted resources that are not shared by everyone. The overall CPU time and memory are shared across all accounts on the machine, but at the same time, portions of those resources are always dedicated to each account.