Learn Icelandic: Voruð þið úti í gær? - Were you outside yesterday?

Voruð is the plural "were" used with þið (you all/you plural). If you were asking just one person, you would use varst with the singular pronoun þú: Varst þú úti í gær?

Why does the sentence start with the verb voruð?

In Icelandic, just like in English, you swap the subject and the verb to turn a statement into a yes/no question. The statement "You were outside" is Þið voruð úti, so the question becomes Voruð þið úti?

Could I use út instead of úti here?

No, because úti means you are already outside in a fixed location. You use this when talking about where someone is (like with the verb vera, to be). You would only use út when talking about movement, like going outside (fara út).

Why is it í gær and not just gær?

In Icelandic, you cannot just say the word gær to mean "yesterday" in a sentence. You must always use the preposition í (in) with it. It literally translates to "in yesterday."