I would say offer yards, then offer some coordinated bundles, either 1/2 yards or FQ together. I don't know what the market is for FQ A la Carte, you know?
Please, please, please whatever you do...DON'T price and sell by the half-yard. OF course if you want to sell in half-yard increments, by all means do so...but that is my LEAST favorite tactic to put in big bold letters "$4.99!!!" and then in teeny-tiny print "per half yard".