The given data is 30, 34, 35, 36, 37, 38, 39, 40.
There are 8 data points.
Since there are 8 data points, the middle two values are the 4th and 5th values, which are 36 and 37.
So, the median is $$ \frac{36 + 37}{2} = \frac{73}{2} = 36.5 $$
Now, we remove 35 from the data.
The new data set is 30, 34, 36, 37, 38, 39, 40.
There are now 7 data points. Since there are 7 data points, the median is the middle value, which is the 4th value, which is 37.
The increase in the median is the new median minus the old median: $$ 37 - 36.5 = 0.5 $$
Therefore, the median increases by 0.5.