Does having greater magic find or gold find affect the quality of the gems dropped? If I have a decent amount of magic find and a monster was going to drop a Chipped Ruby, is it possible for the magic find to update it to a Flawed? Or it is based solely on the difficulty level you are on and the static drop rates of gems?
Magic Find has always been one of the most popular item attributes in Diablo. Magic find helps increase the probability that a higher quality item will drop from monsters.
This need more tests, but you can follow the main idea. Magic find does not increase the drop chance for gems.