'78 Mercury? I think I would stick with the 'rude. Mercs of that era are finicky in my opinion, although there are die hard merc lovers. A carb rebuild is an easy thing to do yourself, so I would take the 'Rude for 400 less, as that would definitely cover the cost for a marina to do it. Does that motor have a single or double carb? I can't remember off the top of my head, and my manual is in the shop surrounded by greasy parts, so I don't want to go look at it. Carb kits are 20 - 30 bucks per carb, and shouldn't be more than 2 hours labor. Probably one if he is familiar with these. Anyone know what the going rate for standard shop labor is? I do all the work myself, so haven't a clue.
The fuel pump I would definitely do myself if I were you. It shouldn't be more than 5 screws and 2 hose clamps, and it should be right on the side of the powerhead, in easy reach. Don't know the price of these off the top of my head, but I don't remember it being much last time I got one for a 50 horse.
The 400 he takes off should cover all that work, even if the marina does it. So, I would probably take it for that.
One thing though, take a oil pan, wide slotted screwdriver, and possibly a crescent wrench next time. (crescent wrench to put around screwdriver to get more power. Sometimes these things are stuck) Pull the lower unit oil plugs, and look at the fluid. If it is milky, or has water and/or metal shavings, I would probably avoid it, but if it is fairly good fluid, even if it is black, I would go for it. But, DO NOT pull the phillips screw. That holds the bottom of the shift rod to the piece that goes around the clutch dog, and if you loosen it, the lower unit will have to be disassembled to replace that screw.