You have to include the jQuery library. You can use the Google CDN for that:
<!DOCTYPE html>
<html>
<head>
<title>Button Magic</title>
<link rel='stylesheet' type='text/css' href='stylesheet.css' />
<script type= 'text/javascript' src='http://ajax.googleapis.com/ajax/libs/jquery/1.9.1/jquery.min.js'></script>
<script type= 'text/javascript' src='script.js'></script>
</head>
<body>
<div><br/><strong>Click Me!</strong></div>
</body>
</html>