Problems with graphics card?

My macbook has been doing some strange things lately. Sometimes it will just freeze then the screen will start fading to gray. The only way I can get it to stop is by lightly turning it sideways, and it will unfreeze itself and the gray will go away. Sometimes afterwards, the screen will start flickering. It hasn't been dropped, but I do carry it in my bag, so it might have been jostled a little.

Here are some images:








1.) Is it the graphics card?
2.) Is it covered by Apple Care?
3.) If it's not, where can I buy a new one and for how much? Under System Profiler > Graphics/Displays, it said my computer uses a NVIDIA GeForce 9400M. If I have to buy one, are they less than $100?

Thank you.

Welcome to Mac Forums.
It looks like the graphics chip (which is integrated into the logic board), and is not replaceable.
The good news is that it is covered by AppleCare
Make an appointment with the Apple Genius bar.