does prestige of university where I will be getting my Master's degree matter? I was recently admitted to few universities for my master's program and I narrowed the university of my choice down to two. The options are:

Option 1: A Mid-ranked public university in US (around #160 among the US National Universities,around #500 in World ranking ), where the potential supervisor is believed to be a good fit for me

Option 2: A top ranked university in US, here I am mostly going after the prestige, but supervisor is not as good as the university mentioned in Option 1.

If I am planning to get a job directly after my master's (i.e. without doing PhD, although I might go back to school for PhD after gaining some work experiences on my belt), which option would you take? I have very good GPA from my undergrad years (4.0), and my parents want me to take the second option, but the first option is considerably more affordable and plus I like the fact that the first university has a good potential supervisor...

any thoughts are welcome

:)
Go for option 2. 

When it comes to an MSc the role of your supervisor is less important than that in a PhD. Yes, you have to do some research (not always) and working with a "great guy" if far better than working with an "OK guy", but remember you are doing an MSc and planning to go to industry. People will care more about your grades than your research potential (short-sighted but true in my experience). 

In addition, being in a more prestigious institution opens you more avenues; it will be a better selling point 5 years down the line and the top-ranked US university will probably have a better alumni network than a mid-rank public university. 

In general, MSc studies are a way to buy some credentials to use either in the job market or as stepping stone to move to a better institution for your PhD than the one you are already. Get the best possible.