Answer
Clouds tend to form above islands because land has a lower specific heat capacity than water does. The land is warmed faster than the surrounding water, causing updrafts above it. The air that is swept upward will expand, because the atmospheric pressure decreases. As the air rises and expands, it cools.
Cold air can hold less water vapor, so the vapor condenses and forms clouds.
Work Step by Step
This is discussed on page 325.